We've discussed it before, but I used a smith machine for bench press when I first started and got a very inaccurate read of how much I could bench. It easily added 30 lbs to my bench just from using the machine instead of a bar.

The squat rack should have protection bars on the side that catch the bar if you drop it. At the weights you and I prob squat, there's not much danger of hurting yourself, though you might look foolish if you mess up.