Q:

Actionscript 2.0 and 3.0: Specific "text" in input box causes certain image to display

I want to know how(and what scripts) to take words from a text input box and cause it to display and image Ex: if the text box said "smiley face" in it, then the image "smiley_face.jpg" would display on a certain movieclip and can be dragged around the stage and when a new image is loaded, it doesn't replace the previous image on the movie clip. 

A:

You need to listen for the textInput event and you need to constantly search for "smile" using something like the search() function(u can use strings or regular expressions). 
It returns -1 if the string you're searching for wasn't found, otherwise it returns the first index where the searched string was found. 
Here's a really basic example:
var ti:TextField = new TextField();
ti.type = TextFieldType. INPUT;
ti.border = true;
addChild(ti);
ti.addEventListener(TextEvent. TEXT_INPUT, onInput);

function onInput(event:TextEvent):void {
    if(ti.text.search('smile')!=-1) trace('display smiley image');
}

You did mention smileys, so depending on your level of comfort with actionscript 3, it might be also worth having a look at Thibault Imbert's SmileyRenderer.  Careful it uses the new FTE so you need to use Flash Player 10, etc.