Practically any graphic editor can be used to design/construct smilies. the gimp is a nice freeware graphic software that is more than adequate to allow you to design smilies. Alternatively, if you have money to spend then photoshop, paintshop pro are very good programs to use. I'm not exactly sure but I think there is a 30 day trial of photoshop that you can download and use if it's only smilies you want to design.
You can download the gimp for free Here or go for photoshop here with the restriction of a 30 day trial.
I have photoshop CS2 already. I was thinking there is a special programe for this.
I wouldn't say there's a specific program with regards to smiley/emoticon construction. However, I suppose if your speaking dedicated smiley construction then the only thing I can think of are the smiley generators you can use. CS2 is more than adequate to construct emoticons. If your asking how to design them or what techniques/tools to use then I would say think vectors and use the shape tool and apply blending modes to get a desired effect. You could construct them entirely from scratch by using the Pen Tool to contruct the face features (eye's, mouth eyebrows etc). To be honest, there's a thousand ways to go about designing emoticons so I would suggest you google for some tutorials to give you an insight on how they are made. That said, they really aren't that difficult to design so you should get by without the assistance of any tutorials.
He also needs imageready combined with photoshop to make animated smilies.
Photoshop CS2 supports animation AFAIK but quite poorly.
It all depends on how you want to create an animation. For example, If you're animating with paths and anchor points then the new introduction of the animation feature in photoshop was long overdue. Granted, Imageready is a little more versatile but photoshop is more than adequate for animations, it's down to how you want to implement an animation.
Imageready is bundled in with photoshop. If, by the offchance he only had photoshop, he could still create any animations in photoshop that he could in imageready.