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If it came loose after driving, either the bearing is new defective (unlikely) or one of the outer races was not seated in the hub when you finished the first time. As you drove, the race pressed in deeper which loosened the bearing.
The smoke worries me. I think you should dismantle and at least replace the grease and give the rollers and races a careful visual inspection.
Oh yes, you really CAN overtighten wheel bearings.
The link to the description in the other first posted answer to this question was very good.
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