It is narrated from Sayyiduna Jabir bin Abdullah (may Allah be pleased with them both) that he (peace and blessings be upon him) said: "Smiling does not invalidate the prayer, but laughing out loud breaks the prayer."
Another hadith has been narrated about smiling in prayer, the like of which is not used as proof.
Hadith Referenceالسنن الكبرى للبيهقي / كتاب الصلاة / 3360