Being smooth in a group ride helps a ton. Being smooth in a race, I don't think this helps all that much other than to avoid crashes. I usually steer clear of anyone who wobbles or rides sketchy in races. But that is kind of advantageous for them because now it's harder for me to draft them,etc.

EDIT: But once I notice them, under no circumstance are they getting a wheel in front of me, I'll close the gap and move over if I have to in order for them not to get in. The last thing I want to be doing is being single file behind a dude who whobbles all over the road.