Any use of smack-talk, which is defined by me pretty much as DJ_Jestar defined it, is unacceptable in my eyes. Trying to bait someone to come and fight you is pretty low-form, unless you do it in a role-play fashion.
It's the role playing that is so open to interpretation though really, smacking in a normal moronic knuckle dragging fashion just makes people look like idiots, doing it in such a way that baits ...but at the same time shows a degree of thought and intelligence is much better, and I wouldn't class that as smack talk.
It's all in the sentence construction, the words used and the way they are delivered. Use of bad language and typical Eve-lingo, such as 'noob' and 'carebear' or acronyms such as 'OMG' and 'WTF' really makes people look like complete fools in my book and is just blatant smack-talk. Where as delivering Minmatar specific insults, or Amarr insults in proper English, or whatever language you speak is really role-play not smack, in my opinion.
I think this is a very grey area really, you have to be careful with it and most people in my experience, have no idea, they forget the role-play part entirely and that then results in all the atmosphear disapearing and you start to forget it's a game and treat it more like a sport. And at this point it all starts to become really silly and juvenile and thats when I switch off and walk off usually
I both love and hate Eve, I really enjoy the game, and I love the community I am part of but at the same time there is a culture in Eve, that 'noob' and 'carebear' and 'adapt or die' culture that I really don't like, the self righteous egomaniacal bunch who seem to think most people play purely for their amusement. I don't need to go into detail in this regard I am sure, you just have to spend some time reading the Eve-O forums and these people make themselves glaringly obvious. Most of them seem to be fairly intelligent individuals though, and many of them are what I would call, some of the best Eve players around...but so many seem to have this almost incredible attitude problem, it's quite amusing in many respects I guess ...makes me wonder what they'd be like if I met them in the pub