There is a bug where sometimes the face count in the heads up display does not update but, yes the mesh will be subdivide 2 times by default when you have the smooth preview on. If you export the mesh while the smooth preview is presses it will only export the unsmoothed mesh. To export the smoothed mesh you must actually smooth the mesh using the mesh menus smooth command.
smooth preview subds mesh - YouTube
NOTE: Just a note. You can show the actual mesh subdivisions by going to the objects attributes smooth mesh node and check the Display Subdivisions check box.
Hope this clears things up.
"If I have seen further it is by standing on the shoulders of giants." Sir Isaac Newton, 1675
Last edited by ctbram; 31-08-2011 at 07:01 PM.