FYI... i would check out the fan too.
Mosfets are no more prone to going up in smoke than anything else. Its possible that the fan itself is knackered which caused the excessive current draw through the transistor that made it go up in smoke. Although any product available to buy should have current limiting designed into the circuit, which in the case of a fan controller, should be rather easy to do.
Check your fan. Check it rotates as easily as it should and there is nothing stopping it from spinning, and maybe check it with a multimeter if you have one. Failing that, plug it into another port on the fan controller, if you get smoke again, chuck the fan away, or return it. Better to try it on this fan controller (assuming it works at all) than risk causing damage to something else you might plug it into later.
just my thoughts