When I started I used to use chips and soak them. I thought it was a pain and didn't make much sense to me as a former boiler/dry kiln operator. Now I use chunks and don't soak -- I just make sure I set the chunk off to the side of the fire as much as possible.
As was already stated -- wet wood does not produce smoke, it does produce steam. The wood will not smoke until enough of the free moisture is driven off and the wood starts to reach combustion temperature. Once that happens, the wood is just as susceptible to flaring up as if it was put in there unsoaked. If the heat source is too intense for the wood to just smolder, it will flame up whether it was soaked or not. Chips are more likely to burst into flame since there is more surface area expoesd.
Knowing that this is an ongoing debate that will likely never end
-- let me say this. If you use chips and soak and it works for you and you are happy with the results, great, keep doing that. If you are looking for a method, I would suggest using chunks and not soaking.