I believe the Terrano 2.7TD engine is Euro 2 - so low tech is an apt description.
The engine pre-dates the really accurate diesel fuel injection in Euro 3 and 4 - so it will tend to over-fuel under load and smoke quite badly.
The engine is a common rail diesel, but working at a much lower pressure than Euro 3 or 4, and it also misses out on the much better (finer) fuel spray pattern from the newer Euro engines - low-pressure and big droplets means a smoky burn at the best of times.
What can you do to fix it?
1. You could have the engine tuned by a true diesel specialist - so that it doesn't over-fuel under load - and that would certainly help to minimise any smoke.
2. You could have the fuel injectors cleaned (professionally or by using a fuel like V-Power or with an after market additive). One of the reasons for diesel smoke is the poor spray pattern from the early generation injectors - but if they are dirty, then they'll cause really massive amounts of smoke. Clean injectors mean the best possible smoke performance.
3. You could fit an exhaust deflector - but unless that deflector routes the exhaust into a totally different part of the under-body airflow, it won't do anything.
4. You could use a fuel that doesn't smoke as much as conventional pump diesel. When normal diesel fuel burns, the straight chain hydrocarbons burn first followed by the branched and ring compounds - these other compounds only partly burn during the combustion process and that's the smoke you see. The performance diesel fuels, like Shell V-Power and others, are mainly straight chain hydrocarbons and completely burn during the combustion process - on an engine such as yours, you should see 50% less smoke or better.
But Shell V-Power, BP Ultimate, Total Excellium, etc., are more expensive than normal pump diesel - and you won't see the improved fuel consumption benefit (5% or so) that the driver of a Euro 4 engined car would also experience - just the smoke removal.
5. You could think about using a fuel with a higher percentage of bio-diesel. This has good lubrication properties (and will help keep the high pressure pump and injectors in tip-top condition) but more importantly, bio-diesel is a fuel composed of straight chains, so it burns really well - and adding 10% bio-diesel will reduce smoke by almost 10%
You need to research and consider the impact of this - and get professional advice on whether it's OK for use in the Terrano - but running on 50% bio-diesel should reduce the smoke by at least 40%
And if the engine and other parts of the fuel system are compatible with 100% bio-diesel, and if you have a supply local to you (Green co-operative or similar) then burning 100% bio-diesel in the spring to autumn (and 50% in the winter) should make you smoke free
6. Using a Cetane improver like Millers really won't help that much with smoke. True it will boost the Cetane rating of the fuel (which the Terrano can't benefit from) but it doesn't significantly affect the burn process for the smoke forming compounds in normal diesel - so I'd leave this one to last.
Robert
- and its a right pain in the ar*e to clean of afterwards!!! Strangley enough more with the LWB then the SWB... maybe I'll try clean the injectors as mentioned above. 
