Marketing deceptions. The term is mainstream in this general sense.
Among hackers it's strongly associated with bogus demos and crocked
benchmarks (see also MIPS,
machoflops). They claim their new box cranks
50 MIPS for under $5000, but didn't specify the instruction mix —
sounds like smoke and mirrors to me.
The phrase, popularized by
newspaper columnist Jimmy Breslin c.1975, has been said to derive from
carnie slang for magic acts and ‘freak show’ displays that
depend on trompe l'oeil effects, but also
calls to mind the fierce Aztec god Tezcatlipoca (lit. Smoking
Mirror
) for whom the hearts of huge numbers of human sacrificial
victims were regularly cut out. Upon hearing about a rigged demo or yet
another round of fantasy-based marketing promises, hackers often feel
analogously disheartened. See also stealth manager.