My favorite smoke-friendly bar is on Sutter in the Tender-Knob area: The Summer Place. Here's a link to the Yelp review.

SO AWESOME. Seriously.
This is a quiet bar, and every time
I've been in here they have like 5
people max in the place. You slink in
here to listen to the juke box and
possibly do some serious drinking in
relative peace.
For the smokers amongst you, this place is a smoking establishment.
Two points, right there. You can have
the bartender pour up your favorite
libation and light 'em up at the bar.
Classic, I tells ya!
The decor is retro. I am undecided if this is on purpose or
through what would otherwise be known
as neglect. In either case, the place
is pretty damned awesome to be in.
Like stepping back to the days of
yore. For real flavor they have a fire
place, which is operational. Score!
Perfect compliment to that smoke and
the brew on a cold summer evening in
the Bay City.