I am pretty sure that functionality is not built into MT. If you are a Perl whiz, you could try to add it yourself. I don't think it's something you could easily do on-the-fly when the comment list loads, it would have to be done when the comment is submitted. Maybe the "remove_html" subroutine in Util.pm could be re-jiggered to remove swear words too. Sorry, I'm a PHP girl, not a Perl goddess.  :)

I'm glad you pointed out the smiley hack ... I've wanted to do this since I started using greymatter and was ecstatic to see that it's possible with movabletype. Yay! Now I have fun smileys in my journal entries

is there a way to prevent people from writing certain words in the comments like you can censor these words kinda? just like in megabook when you add them to a banned words list and they just show up as *****'s?

One way to do this would be to use Lynda's smilies hack and use the idea at the bottom about replacing text with other text or links.  I think this might be the easiest way of censoring

Kristine