Smoothing groups don't provide a subdivided surface. The real comparison is meshsmooth vs turbosmooth, and afaik turbosmooth is simply a faster, newer algorithm.
Lose the turbosmooth. You should never ever use a smooth algorithm on a realtime model in my opinion. http://www.poopinmymouth.com/tutorial/tutorial.htm
The algorithms that programs like that use are not suitable for LOD 0 (or 1 for that matter) for game props. The meshes they generate are very often not meant to be seen up close.