The idea that it's unsafe to squat below parallel is actually a myth!
Doing full (below parallel/ASS TO GRASS) squats are better for your knees because they remove tension from your kneecaps and distribute the weight across your butt, hamstrings, calves, and hip abductors. You get a fuller Range of Motion and increased flexibility and strength gains. It's actually the more "natural" movement: http://forum.bodybuilding.com/showth...hp?t=128243861
Obviously you should do what feels comfortable and safe, but moving into a full squat position is far more beneficial and demonstrably safer. Especially on a Smith machine (I even do ass to grass squats on free weights, and I have a slight handicap against me).
The only issue is you have to worry about keeping your lower back straight and concentrate on the hip drive movement. That just comes with experience.
Edit: Thinking of rebooting this thread with a new OP, link to this thread, and links to helpful sites/videos/dicussions/etc. The OP in this thread is awful and not helpful whatsoever.