set smooth not setting smooth

All of a sudden i’m not able to get a smooth out of set smooth. Is there a setting I have inadvertantly messed up? This just started happening this morning. Any help is appreciated.
Here’s the image with the artifact:

Is it happening on the mesh only? Try recalculating its normals.
Is it on going on every new file? try deleting you .B config Blend file.

I wonder how my .blender got corrupted? Thanks arangel