It's true - smiling can actually make you feel better. Recent studies suggest that our emotions are reinforced, maybe even driven, by facial expressions.
It was actually Darwin who first suggested the link between facial expressions and emotions. In 1872 he said "The free expression by outward signs of an emotion intensifies it." In other words, smiles will make you feel happier, frowns will pull you back the other way.
Psychologists at the University of Cardiff in Wales found that people whose ability to frown is compromised by botox injections are happier, on average, then people who can frown. Dr Michael Lewis, a senior lecturer at the university’s school of psychology, said “We know from research in the past that if you make someone smile they feel happier. More on this study here
It appears facial expressions also have a relationship to pain. The May 2008 Journal of Pain reported that people who frown during an unpleasant procedure report feeling more pain than those who do not.
For more on this topic, see Scientific American Mind's Smile! It Could Make You Happier