People are always smiling, especially in groups, but it doesn't just signal that they're happy, far from it. We use smiles for specific social purposes because they can send out all sorts of signals that can be useful for us.
Here are ten ways smiles can be used to our advantage by sending out messages about our trustworthiness, attractivity, sociability, and more. . .
This is a good summary on research of smiling, although very little is actually on the communicative functions of smiling.
I also wonder how would this translate to digital communication? Emoticons clearly do not function the same way.