I don't smoke, never have. Its appeal has always eluded me – just very thought of ingesting waste fumes into my lungs makes me cough. Mind you, some life-long teetotalers may have something to say about my drinking habits, so who am I to talk?

In the past, smoking in films was often been less a reflection of real life than a statement of cool – when Humphrey Bogart, Lauren Bacall or Alain Delon smoked, they made it look like the hippest habit in the world. Which is, of course, the reason such cinematic portrayals have increasingly come under fire and why it has become such a no go area for American TV. Remember Cheers? Almost every episode was set in a bar, a location as notorious for the exhalation of smoke as for the ingestion of liquor, but how often did you see any of the main characters with a cigarette dangling from their lips? (Unless you wanted to make Rebecca look temporarily repulsive to Sam, of course.)

Smoking, of course, has often been linked with sex, the use of the cigarette as a seduction accessory and perverse advertisement for the sexuality of its user, its obviously phallic connotations, the famous post-coital smoke. This played a key part in Lawrence Kasdan's 1981 debut feature Body Heat, yet only recently I read an article rather judgementally slamming the movie as a prolonged advertisement for the tobacco industry. So in 1995 when Wayne Wang and Paul Auster made Smoke, set around a cigar store and featuring a cast of characters almost all of whom revel in the joys of tobacco smoke inhalation, it was most definitely flying in the face of fashion. And yet it attracted barely a single negative comment to this effect. Title aside, this appears to have been achieved through an extraordinary sleight-of-hand that resulted in this aspect of the film playing an almost incidental second fiddle to its quietly delicious effectiveness as a character drama and its open celebration of the power and pleasure of storytelling.

The film has five principal characters: Auggie Wren runs a cigar store on a street corner in Brooklyn; Paul Benjamin is a writer whose run of respected books came to a halt when his pregnant wife was killed in a robbery; Rashid is a smart seventeen-year-old from a tough black neighbourhood who is new to the area and looking for a place to stay; Cyrus is a down-on-his-luck garage owner with a prosthetic arm; and Ruth is a penniless, one-eyed ex-girlfriend Auggie hasn't seen in years. The relationships between the characters at the start of the film are either casual or non-existent, but connections are soon formed, often by chance. Paul wanders dozily from Auggie's store and is only saved from being hit by a truck by the quick thinking of the passing Rashid. Believing that karma can only be restored if he returns the favour, Paul offers Rashid somewhere to sleep for a couple of nights, which he eventually accepts. Later Paul secures Rashid a job at Auggie's store, which has a profound and unfortunate effect on Auggie's own plans. This triggers a monetary exchange whose story began before the one that plays out in the film, but in the course of subsequent events involves Paul, Rashid, Auggie and Ruth. Ruth by then has turned up unexpectedly with the news that eighteen years ago Auggie fathered a daughter, who is now strung out on crack and living with a psycho. Cyrus, meanwhile, may or may not be Rashid's real father, information that he will only become aware of when he is in the company of three of the film's other main characters. Oh it all makes perfect sense when you see it.

Everyone here has stories to tell, but all do so in different ways and for their own sometimes very personal reasons. Paul used to make his living through novels but has not been published since the death of his wife, yet he still grinds away daily at his typewriter on work that is never openly discussed. He now uses his storytelling skills to engage others with anecdotes, whether it be the cigar store patrons with tales of Sir Walter Raleigh's attempt to weigh the smoke produced by a cigar, or Rashid with the true story of Russian critic and literary theorist Mikhail Bakhtin, who in 1942 during the siege of Stalingrad, desperate for cigarette papers, smoked his only copy of a study of the Bildungsroman that he had been working on for ten years. Rashid also tells stories and indeed has quite a gift for the gab, but the characters he creates are for himself, false identities and background details to enable him to adapt to whatever situation he may find himself in. Ruth carries with her tales of past romance and present misfortune, while Cyrus's missing arm is a very visible story just waiting to be told, and when it comes it takes the form of an almost biblical tome in which God passes everlasting judgment on his humble servant. And then there's Auggie, relating the history of his store through thousands of photographs taken from the same spot at the same time every day, and later delivering the Christmas Story that was the title of Auster's original published work. It provides the film with a simple but gorgeous final scene, one that may be the truth, Auggie's own fantasy, or the tale that Paul creates after hearing it (an ambiguity removed in the extra features, it should be noted).

The structural beauty and humanism of the script, coupled with the sort of long monologues that actors adore, ensured that Wang and Auster were able to cast the film pretty much to their exact specifications. The actors respond accordingly with a string of wonderfully judged and largely low-key performances that create fully rounded characters in just a few minutes of screen time. Having landed with a bang so early in his career with the likes of Altered States and the aforementioned Body Heat, William Hurt's star had faded a little by this point in his career, but here he reminds us just what a great actor he is when matched with the right material, making Paul a compelling screen presence from the opening scene. This troubled Brooklyn writer who later creates the story on which the film was based appears to be very much Paul Auster's cinematic alter ego, something reflected in Hurt's interpretation, which is clearly based on Auster, right down to his distinctive vocal delivery. Also given the chance to gently shine is Forest Whitaker, Auster's first choice for the role of Cyrus and one that Whitaker himself was immediately enthusiastic to play. Making fine use of his natural twitchiness and bulk, it's in his own storytelling scene that he gets to show just what he is capable of, trying to make light of an event that forever changed his life and remains a suppressed but still painful memory. Later, when he is delivered news that he does not want to believe or to deal with, his anguish is powerfully communicated. As Ruth, Stockard Channing displays a controlled desperation that is always convincing, and if Ashley Judd at first seems to be slightly overplaying the angry daughter Felicity, just watch the extraordinary expression of suppressed despair that slides onto her face when her mother departs – now that is film acting. As Rashid, meanwhile, newcomer Harold Perrineau Jr. (later to land the pivotal role of August Hill in Oz) is an instantly likeable delight, especially given that this is a performance within a performance, a young man who copes with human interaction though a carefully constructed play on the truth, something that eventually drives Paul to shout a frustrated "Cut it OUT!" and which later crumbles to reveal the real boy that dwells beneath. And then there is Harvey Keitel, a man who repeatedly delivers fine performances that do not look like performances at all, here making Auggie a most believable star around which the others can orbit. It's also great to see him play a genuinely nice guy, a far cry from many of the roles he is most famous for.

Though Wayne Wang is credited as director and Paul Auster as writer, no secret has been made of the fact that this was very much a collaborative effort, with Auster involved very directly in the film-making process at all stages (the opening credit announces this as 'A Film by Wayne Wang and Paul Auster'). In some ways the direction is the most low key aspect of all, kicking resolutely against the prevailing fast-cut, roving camera style of modern American cinema in its almost complete lack of close-ups, with most of the action observed in master shots or simple two-shots, which are held for far longer than many modern viewers will be used to, reflecting the intention of the director and writer to make "an Ozu film in Brooklyn." This is particularly suprising when you realise that one of the executive producers was a certain Harvey Weinstein.

And it all works divinely. If one or two of the plot points seem designed purely to prompt a narrative turn then it's only because the character-based sequences are so unforced and natural, and it is these scenes that provide the film's principal pleasures, as characters sit with each other, interact, reveal things about their lives and tell each other interesting tales. The plot unfolds almost unnoticed in the background and has only one function, to develop the characters and their relationships to each other – if you want proof that plot is driven by character then look no further. Everybody ends up affected by their past, and the results are often genuinely moving, in particular the quietly extraordinary scene in which Paul looks though Auggie's photo collection. Initially a little bemused by this project, he only begins to understand what the images are about when Auggie advises him to take his time. As he does so and begins to appreciate the pictures for what they are, we are given the opportunity to do likewise, to enjoy the subtle differences that make each picture unique and in its own way surprisingly captivating, and then Paul spots his lost wife Ellen in one of the photos and all of his suppressed grief wells to the surface. In many ways a simple sequence and one that occurs early on in the narrative, it nevertheless carries extraordinary emotional clout. But that's what happens when we genuinely care for characters without feeling we have been cynically manipulated into doing so.

Smoke is a gorgeous example of modern American cinema at its most carefully crafted, a wonderfully written, played and directed study of character and community and the importance of storytelling, and a rare example of an insider and an outsider working in perfect harmony to produced a unified vision. Here, in an age of on-line information, email, text messaging and an explosion of TV channels, is a perfectly judged reminder of the simple pleasures and benefits of direct vocal communication. And, of course, of a quiet, relaxing smoke.

How do you go about promoting a DVD to the buying public? Well one way, if the disc has a number of nice features, is to plaster that information all over the cover. Or at the very least mention it. Mirimax, however, either don't seem interested in what they have here or simply haven't checked out the disc. Either way the packaging does this disc no favours, and simply fails to inform any potential buyer (and any on-line DVD site given to listing such information) just what lies within. But more of that below.

We are informed on the back cover that the transfer is framed at 1.85:1, but no mention is made of any anamorphic enhancement. Serious omission number 1, as a fair number of us are instantly put off by the thought of a non-enhanced transfer, but Smoke is not only anamorphically enhanced, it looks terrific. Pin sharp, with excellent reproduction of the film's sometimes pastel-weighted colour scheme and contrast that is close to perfect, the only blip occurs in a single shot of Paul's unlit apartment, where the black levels have greyed out a little and compression artefacts are clearly visible. Otherwise this is a treat.

The 5.1 sound is for the most part subtle and front-weighted, though the urban atmospherics during the opening credits are very impressively spread and the LFE thud of music from a passing car early on reminded me that I have a subwoofer. Music and dialogue are very cleanly and pleasantly presented – a good if unflashy mix.

Now we really get to where the packaging lets the film down. No mention is made anywhere on the DVD sleeve of special features, so to see an Extras option on the menu was intriguing to say the least. When I selected it, expecting to find just a trailer, I got a genuine shock. This is no movie-only release, but comes close to qualifying as a full blown special edition, and indeed has more features than some discs that abuse that term. So what do we have here that Mirimax seem so uninterested in telling us about?

First up is a commentary track by writer Paul Auster, producers Peter Newman and Greg Johnson and actor Harvey Keitel. That's right, you heard me. Why would you want to keep that a secret? As it happens, Keitel's input is minimal and restricted to a few brief but still worthwhile contributions – he also gets the final word, and clearly still has great affection for the film and the role of Auggie. The contribution of the others at first seems to be non screen-specific, especially given Auster's very mannered and slowed-down staccato delivery, which at first sounds as if he is reading hesitantly from a prepared manuscript. But it's what he says that counts. With help from his colleagues, he explains the genesis and development of the project, which seems to have been largely the result of persistence, patience and a couple of fortunate coincidences, and as the commentary progresses it becomes more screen-specific, with all three commenting on individual scenes, the performers, the score, characters and many of the technical aspects. Mention is also made of advice given by Robert Altman, a man also adept at telling multi-character stories, and the unlikelihood of being able to make this sort of film in 2002 (when the commentary was recorded for the US release of this disc) "unless there were major, major stars involved."

The number of sequences cut out of the film are frequently mentioned in the commentary, but there are just two Deleted Scenes included here. Both are framed 4:3 and sourced from what looks like a video copy. The scenes are Andrew McCarthy in the Smoke Shop (2:39), an enjoyably jokey scene that feels more like an out-take from the film's companion piece, Blue in the Face, and The Chinese Restaurant (5:11) which develops the relationship between Paul, Rashid and April Lee, the bookstore clerk the two take out to celebrate Rashid's birthday, and features some more storytelling from Paul.

Behind the Scenes (20:49) is a documentary on the creation of the film shot on 4:3 video, and built around interviews with Paul Auster and Wayne Wang, but also includes brief chats with William Hurt, Harvey Keitel, Stockard Channing, Forest Whitaker, Ashley Judd, Harold Perrineau Jr. and cinematographer Adam Holender, all which which is intercut with extracts from the film and some behind-the-scenes footage. It's interesting enough, though if you listen to the commentary first, much of the information supplied will be familiar.

The Original Featurette (5:41) is the original EPK for the film, a typically fast-paced collection of interviews, extracts, behind-the-scenes moments and positive sound bytes. It's still interesting, though.

B Roll Montages contains five behind-the-scenes sequences shot on 4:3 video. These are of interest, in part for the chance to watch the actors at work without the sheen that film inevitably brings, but also to see how Wayne Wang works with his performers and crew. The scenes range in length from 1:05 to 7:10.

Finally, Auggie Wren's Christmas Story is a textual reproduction of the Paul Auster story that was the inspiration for the film. I really appreciated this inclusion.

Smoke is a rare and wonderful thing, a modern American film that moves at its own, unhurried pace and yet delivers in spades. A great script, richly detailed characters, fine performances, and direction so restrained that it's almost invisible all combine to create a quietly mesmerising whole. Given splendid presentation on this DVD, it boasts a number of worthwhile extra features that get no mention on the packaging, making it one of this year's most clumsily handled releases. But there's a real up side to this – despite the retail price of £15.99, you can find it on-line for as low as £7, making it also one of the bargains of the year. Well, what are you waiting for?

But it doesn't end there. Towards the end of the shoot, Wang and Auster secured a few extra days of filming from Miramax and in that time made a semi-improvised companion piece Blue in the Face. Different in style, it features many of Smoke's background characters in larger roles, plus a number of celebrity cameos. The disc is reviewed here.