Vertex smoothing question

Does anyone know if using Mesh>Vertices>Smooth will physically alter the mesh (as using subsruf does) or it is only a cosmetic feature for pre-rendering?

So I guess what I’m asking is: if I use the Mesh>Vertices>Smooth (or Smooth button under Mesh Tools) and export the model as a DXF or OBJ file, will it just revert back to the original mesh structure or will it retain it’s smoothness when I open up the exported file?

You got it wrong, this only affects the position of the selected vertices, it is nothing like subdivide.