Now you don't need to rely on third party software to type smiley or emoji characters as the iOS 5 and 6 include a built-in Emoji keyboard.
To type a smiley or emoji character, tap the "International" key on the keyboard (or touch and hold the key, then slide to Emoji), a plethora of emoji characters are then at your fingertips.
On my device upgraded to the iOS 6, the Emoji keyboard is enabled by default. In the iOS 5, you can enable it in a few steps:
Go to Settings > General > Keyboard.
Tap "International Keyboards" and "Add New Keyboard..."
Select "Emoji"