AppleOnYa,
That made me smile, thanks. It's funny that someone started this discussion about Micheal's smoking. I first noticed in the first Godfather when I was about 18 the scene at the hospital and why the camera lingered on Micheal so long after he lit the cigarette. I finally figured out it was because he noticed his hand wasn't shaking and he could be calm under stress.
As the years went on and I watched the movies over and over, I noticed the cigarette tool was used in other scenes as well. Notice in I & II, anytime Micheal is put up against the wall and cornered, he lights up. Yes, in the context of the scene, he's like anyone else who gets stressed and goes to light up. But I don't see Micheal was a common chain smoker who just lit up at any given time. FFC used the cigarette as his tool to measure his self control. A device to keep his composure. The irony is in scenes that immediatly follow him lighting up, he ends up totally losing it anyway.
Examples:
1)At the end of the I, when he talks to Kay and she keeps berating him about Carlo. He lights up,then explodes.
2)In II,In the hotel with Kay, he tries to hold it together and run his pimp game on her as he lights up, but when she drops the abortion line, he explodes completly.
3)In II, at the New Years Eve Party in Cuba, when the revelation is made about Fredo's betrayal.
He lights up and puts his head down and then after trying to be cool, he says f*** it and plants the kiss of death on Fredo, kinda losing it. Definitely breaking his cool.
4) Also in I, right after he lights up with Enzio,
the cops pull up and Micheal goes off on McCloskey, which is really his turning point as he gets bitch slapped for opening his mouth.

In III, within the context of the scene, he is rejecting the cig from ZsaZsa because he really doesn't like him, but also because he is trying to reject the things and people of the mob world. The cigarette was apart of that and Micheal is trying to clean himself up as well as his family.
I believe it was definitely a symbolic device by FFC. Man, you think I watch the Godfather too much? (: