To make smoke on a rocket launcher like this:

Cut the ends off a Q-tip
['cotton bud' in the UK] and stick one in the front center and shape the cotton how you want. Then glue the rocket in place.
On the rear sculpt a larger plume and you're good to go!
This could be used in any weapon thats smoking or vehicle exhaust, id like to see some people use it for other things...
Finished product: