Smudging is a form of cleansing a room, an object, or physical body or place, of negarive energy. With smudging, the vital element is the smoke produced from burning sacred herbs. It is the smoke that binds with the negative energies and carries them away, purifying and cleansing in it's wake.
Smudging is often performed to clear a sacred space before rituals, you can also smudge yourself to to cleanse and purify - especially if you have been weighed down with stress and worry. Smudging is commonly used to cleanse crystals, before dedicating them for healing, and periodically to remove the energies they pick up from doing their work.
Sometimes life creates stresses within families, plunging them into bickering disharmony. Smudging is wonderful for cleansing the whole atmosphere and restoring balance and harmony. Smudging is akin to 'wiping the slate clean' before imprinting your own energies on it.
You can smudge just about anything that needs cleansing. If you move into a new home, it is nice to cleanse it of any residual energies from the previous tenants before perhaps blessing it to create harmony and peace.
Herbs traditionally used in a smudge are sage and sweetgrass, but many other herbs and fragrant grasses can be used. Insense and essential oils can also be used. Choose what "feels" right, and do some research into the meanings and the effects of whatever you decide to use.
Hints and tips on safe smudging can be found here.