Custom Smilies
Do you have the latest version of WordPress but find it impossible to install custom smilies? Well, then this tutorial will definitely help you. The thing is that the custom smilies plugin isn’t exactly up-to-date so instead of being able to manage the smilies conveniently in a menu, you’ll have to manually edit it.
Step 1:
Extract your smilies folder onto your desktop or wherever you will remember. Install the smilies onto your server into the directory: wordpress/wp-includes/images/smilies. Make sure they are not in a folder, so you might want to just select all of your smilies, drag & drop them into your FTP program or whatever you use to upload them. This way your smilies will have a url of /wordpress/wp-includes/images/smilies/angel.gif instead of /wordpress/wp-includes/images/smilies/mysmilies/angel.gif. THAT IS IMPORTANT!
Step 2:
Next, follow the instructions from the site that I listed. Click here
Step 3:
Make sure you go to Plugins to activate your smilies plugin.
Step 4:
Go to your Dashboard & go to Manage > Smilies. Make sure it’s all there. Obviously you cannot edit your text here if you have WordPress 2.5 so you will have to edit the init.php file manually. Does this bite or what? 
You can find the init.php folder in wp-content/plugins/custom-smilies.
Step 5:
Open up the init.php file on your computer using notepad. What you want to do is edit this manually. You can basically figure it out but here’s what the main part of mine looks like:
‘^_^’ => ‘biggrin.gif’,
‘:|’ => ‘blank.gif’,
‘:blush:’ => ‘blush.gif’,
‘:cold:’ => ‘cold.gif’,
‘:confused:’ => ‘confused.gif’,
‘B)’ => ‘cool.gif’,
‘:love:’ => ‘couple.gif’,
‘:kiss:’ => ‘couplekiss.gif’,
‘:crazy:’ => ‘crazy.gif’,
‘QQ’ => ‘cry.gif’,
‘:cute:’ => ‘cute.gif’,
‘:cynical:’ => ‘cynical.gif’,
‘x_x’ => ‘dead.gif’,
‘:depressed:’ => ‘depressed.gif’,
‘:drool:’ => ‘drool.gif’,
‘:toast:’ => ‘drunk.gif’,
‘:emo:’ => ‘emo.gif’,
I only showed you a snippet of all of my code. Only edit the part that I’m showing you. Do not touch the rest.
Step 6:
If you’re using the same smilies as me, this would be super easy. The first part in the quotes happens to be the text you use to summon the smiley. 
Then the second part is the url of your smiley. You don’t need to type it all out because it’s already in your little directory. Make sure to properly use the commas & the quotes.
Step 7:
After you finish editing the init.php file, upload it to your server where it originally was. Replace it. Now you’re done. 
Tip: If you want to add this to your comment form, read the link I provided to find out how you can do that.
If you have any questions, please leave me a comment! I hope this helps those who were confused with this plugin! 