When I saw the small little train someone made to demonstrate the new smoke features, I was very excited. One problem tha tI see though is how would I keep that smoke constand, but at the same time have that “chuffing” look. A video example is posted below.
here is a better clip: http://www.youtube.com/watch?v=rT_ILPaGiiA
the “little” train you mentioned uses a particle smoke system. you could create the puffs by simply animating the initial velocity value.
you can also download the model from blendswap.com and pull it apart to see how it was done.