When it comes to cakes, paper towels are good for more than just wiping stray flour off the counter. They're also the secret to getting buttercream icing to look almost as smooth as professionally rolled fondant. First, slather on your buttercream using the spatula. Smooth it out as much as you can, moving up to an icing smoother to get the last of the bumps out. Then, take a break and relax for a few minutes while the icing sets up and forms a light crust. You don't want the icing to be hard -- just lightly crusted on the surface. For a final touch, take a smooth paper towel (not one with lots of textured decorations, unless you want a nubby cake) and gently place it against the side of the cake. While holding the towel still, rub your hand lightly against it. Pick the paper towel up, and voila! Silky-smooth buttercream.
If you can't find smooth enough paper towels, parchment will work, too.