I think he stopped smoking cigarettes because he noticed that Barzini was the only Don at the big powwow in Part I who was smoking a cigarette (everyone else smoking cigars), and must have concluded it was the sure sign of a traitor. Plus he may have seen the still photo of Luca with a cigarette holder that appears on the bonus disk and could have concluded that it was an awfully effete touch for a guy who goes around chopping off horses' heads and Capone-men legs.