Although I am not completely sure that I correctly understand your question, I think that you are trying to set the DNS servers that your SME server has to use.
Let me first explain that SME server contains its own fully featured DNS server and normally you don't need to set another DNS server in the configuration of your SME server.
If there really is another DNS server on your lan, you can configure your SME server to use this DNS server by accessing the configuration program. Login as user admin on the console (or use PuTTY) and you can access it.
I'm using e-smith beta3(updated with apt-get)
Which specific release are you using? 5.X , 6.X ? What does 'cat /etc/e-smith-release' show?