Hi Psygorn, in your model the blue edge is definitely not smooth. To get a better look at it, assign all surfaces to "Default" style and then export to an .obj file and you can get this display:



You can set up a shortcut key for Space having:
SaveAs c:\test.obj
as a shortcut for getting this kind of display easily.

It's difficult in NURBS surfacing to make a smooth surface patched in between an odd number of open edges like you're trying to do there. That's one of the strengths of sub-d modeling that it can more easily blend between things like that.

- Michael