How can I get smooth fonts in LyX?

To solve the same problem I resorted to install the package cm-super.

Maybe it could be preferable, because you don't need to always remember to put those lines in the preamble.

Insert this into the LaTeX preamble (there's a section for that in the document settings):

% set fonts for nicer pdf view
\IfFileExists{lmodern.sty}{\usepackage{lmodern}}{}

By default the fonts in LyX are bitmap (very long story, don't ask). To avoid this you simply need to select a different set of fonts in Doc > Settings > Fonts. The Latin Modern family should give the same look and feel as CM, only using vector fonts. I like Palatino with Optima (see this rant), but feel free to choose what works best for you.

The LyX FAQ might have some information that you can use.