Correct me if I'm wrong....
Carbon fiber takes strands of carbon, which have a very high tensile strength and then weaves them together and then cures them in epoxy. The carbon fiber weaves are by themselves not smooth. The smooth finish you feel is the smooth epoxy. If you were to break a piece of carbon fiber in half, you would be able to expose the weaves inside. There is also a similar but cheaper material called carbon fiber composite (often just called composite). In the composite, instead of weaving long strands of carbon fiber, you take very small shavings of carbon and mix them into a paste, and the pour the paste into a mold. The final result looks somewhat like a coarse plastic, but is stronger. The composite can therefore be molded into various shapes more easily than true carbon fiber, but it isn't as strong as the woven carbon fiber and is consequently cheaper.
Carbon fiber has some great properties. It's strength to weight ratio is better than most common metals, which is why you also see it being used more and more on the bodies of high end sports cars and race cars. Aside from its light weight, it's fairly good at dampening vibrations, which is why in cycling they'll put carbon fiber in select places to dampen the road vibrations, such as in the front and rear forks and the seat post.

Austin