[240 2NR]

Wihout reading all replies, here's my take:

FADE= bad brake fluid. DOT 3 or 4 should not be spongy after only a few stops, even if it's cheap. It sounds old and damp to me. Flush and refill now. Castrol GTLMA, Valvoline synpower, or ATE superblue have all worked well for me (those are also in price asending order). Avoid DOT 5. It's silicone based and intended for very specific applications. It's actually less abrasive than regualr brake fluid and is often used in antique cars that are rarely run and have delicate lines. DOT5.1 is good stuff, use with confidence.

SMOKE= new pads have resins and adhesives that generally burn off in intial stopping. Sounds like you skipped the break in and this was their first work out. Likely this is just a normal occurance and should not happen again. If it persists, you have problems. Also if your rotors had oil on them (to prevent rust while in storage, not used on plated rotors) and you didn't clean it off before the install, that could easily be your problem.