If the leads were smoking, you've drawn a lot of current.
What stopped them smoking? If a fuse blew, it should of stopped smoking but if you pulled the leads off, you may be ok. I can only assume you have a battery to battery charger and hence putting the leads on the wrong way will cause them to smoke.
Disconnecting the second battery including your B2B charger, and then try again with the new battery (if it's ok still). It shouldn't cause the leads to start smoking again, but if it does, you'll have to isolate circuits to find out why. To do this, remove the bolt in fuses under the battery.