I have nothing against Bob's original AATW but Jimi's is fcuking awesome. It's faultless. Even Dylan preferred it. Back in the 60s it must have sounded like it was coming from another planet! One of my top 5 songs of all time, no doubt.
As for the LOTR smoke thing, maybe they were just getting a buzz off the backy. I'm a non-smoker but when I do have a little puff (or, like when I was in the midwest and tried chew - disgusting) I get a bit of a nicotine buzz... and Bilbo is a small guy - wouldn't take much to go to his head. He probably gets high on sugar.