(Funny how our RP game Newbie Tips thread is ALL PK oriented.)
You're right. 
Make sure when you 'smote' you type the sentence as you wish to see it, as long as you include your name. smote doesn't necessarily replace your name at the beginning of the sentence.
If you don't abuse the ability, you can 'control' mobs. Smote a mob doing something, as long as your name is included.
ex: smote Tamara winks at Twinblades as he walks up to the counter.
This may be of personal opinion, but personalize your emotes as much as you can. If you wish to wave at someone, you can 'wave happily' but if you pmote it, you will always produce something more contextually appealing.
ex: pmote waves with a slight smile as he turns to leave.
If you favor RP highly, consider joining Herald. It offers many great tools to enhance RP for yourself and other players.
Even if you DO love to RP, still be wary in towns. Only under rare cases are you exempt from PK.
There are three main types of RP, imo.
Reactive RP, this is roleplay as you feel your character would respond to a situation given to him. He experiences the world and you as a player decide his next course of action based on his experiences and beliefs.
Egocentric RP, this is roleplay based solely on your character and his own goals and (potential/desired) accomplishments. This type of RP requires someone to join in your RP, or else you will be alone and you are in solo RP.
Solo RP, this is roleplay that either consists of no characters but yourself, or yourself and something imm controlled, that doesn't represent another player.
I make these differences, not because any RP is better than another, this is impossible. I make the differences to shed some clarity on what can be expected from each. None of these types will make your character more successful than another type of RP. And you are NEVER bound to just one type, it is likely you will experience all three, frequently if you invite them.
Egocentric RP is the most easily creative RP because you are in complete control of everything your character thinks, is, does, you know his timeline and his plans. If you wish to be the center of attention or a plot, have responsibilities such as keeping in contact with many other characters, this is the type of RP you will likely enjoy most. Sometimes it can be disappointing if you only try to create an egocentric RP plot. If you are getting few results, try a more reactive RP approach, or work on your ideas alone until someone interested comes along.
Reactive RP is a lighter, more go-with-the-flow type of RP. It requires you to do very little background work, or solidifying your character as a common name. Many people prefer this lower level of pressure, for instance you can back out of an RP plot if you don't have time as a player. A whole plan will not necessarily fall apart if you don't follow through.
Solo RP is a great way to prove your commitment to a character's RP, as if you are snooped by an imm, you are showing the truest, least affected version of yourself. It is also a way, by saving logs, to advance your character, his goals, or a plot he may be involved with.
Nothing about RP is absolute, and there is no real wrong way to RP... aside from NOT RPing, (OOC conduct) It enriches pk, the depth of your character and the ambiance of the game.