avins,
The Smith Chart is just a visualization tool where one can look at the magnitude and phase simultaneously of a complex reflection response. It can be used to intuitively determine what matching elements might be needed and how to get there.
The plotting coordinate system is simply a Polar plot of Complex numbers In this case Re(SNN)+IM(SNN). With an overlay of grid lines that map it more meaningful parameters such as Q and Impedance and admittance etc. In your tool the program is converting the data represented at the marker to impedance ratio relative to Zo.
The smith chart can be viewed as follows
For an s-parameter file the information in the standard file is either dBmag and angle, magnitude and angle, or real or imaginary. All can be represented as Re(SNN)+IM(SNN). Disregard the grid lines for the time being and then you will be able to notice its just a polar plot of this signal. If that is clear then what are the gridlines for? They are a mapping of reflection to an impedance/admittance Ratio relative to Zo.
When I first saw the Smith chart my reaction was what do I do with this, but after using it for a while it is a tool that would be hard to do without. To learn it you might want to only view a single frequency and then observe how the smithchart behaves when you add or remove components.
http://rfcooltools.com