I spent a day trying to smile at strangers. The result was that half of them gave me a "do I know you?" look, and the other half looked at me like I was crazy and backed away.
I think this very much depends on the circumstances. Few working-age men walk in my neighborhood, and some people seem a little uneasy seeing me walking. They don't know what to make of me.
On the other hand, if I walk a dog it is clear what I'm doing, and people are quick to share a smile. It seems like many people are uncomfortable unless your activity fits into a pattern they're familiar and comfortable with.
I remember a teacher who cycled to work every day, along a coastal route. Because he saw the same people so often, he set himself a goal to smile at all he recognised so they'd smile back.
Last time we spoke, he was still battling one obstinate hold-out (while reminds me of an old joke - 'smiles' is actually the longest word in the english langugage because there's a mile between the s's).
I think that largely depends on where you are, and what the cultural norms are. I go out of my way to smile at everyone I see, and most people smile back, even if it takes them a double-take before they do. I'll never not smile at someone, because it's a known stress reliever to do so, especially when my smile elicits another's smile.
Not encouraging...