Is it the slip clutch on the PTO shaft that was smoking? First, put the pto in neutral, shut off engine then check to make sure the tiller rotates freely by hand and isn't binding. If so it sounds like it need to be set up. There should be about 8 bolts with springs on them. Let clutch cool off then loosen the nuts until the springs just touch the flange then tighten them all 1.5 turns. Try tilling a short distance and then check the clutch for heat. If its still slipping, it'll get hot quick. Tighten each of the nuts half a turn and try tilling again. Repeat until clutch does not heat up. Don't overtighten the nuts because the clutch wont be able to slip if you hit rocks or other hard objects with the tiller, thereby potentially damaging tiller or driveline.
I second what both Eric and freewheel said- check the oil levels, make sure the u-joints have been greased, and check the clutch. I did it different- I torqued the bolts to 15 ft lbs. Either method, you want the clutch to hold without slipping when normally using it, but to slip if it gets bound up by a rock or some other object- the goal of the clutch is to protect the tractor driveline. For that matter, it is a good idea to check the clutch before the start of the season. If the clutch gets wet, it can rust and bond the two surfaces together, where they won't be able to slip when necessary. In the spring, I loosen the bolts on mine, make sure it spins seperately, then torque them back down.
If you jumped in and used the tiller without checking everything out, now is the time to get more familar with it. It isn't like a blade or box scraper; it is an expensive implement with critical parts, and it needs attention. The better care you give it, the longer it will work for you.
I don't think they can ship it with fluids in it. If you bought it from a dealer, they should have either serviced it, including making sure the clutch was set up for usage, or they should have informed you that it would be your responsibility. Again, a tiller is expensive; you shouldn't have to deal with a burned up clutch or gearbox because someone didn't do their responsibility.
