Hey,
How do you get smilies in your profile bio? I'm sure I've had it done before
MyBB does not parse MyCode, HTML, images, or smileys on profile fields. I'm not positive if it filters banned words. If you want to modify that behavior you can either use a plugin or edit the member.php file. Look for if($mybb->input['action'] == "profile").
1.8 has this feature, if you want to wait.