How good are used lego bricks on bricklink? In my life I've only ever used new Lego bricks; however, I'm now interested in purchasing large quantities of bricks and Bricklink's used section has significantly cheaper prices.  I know that the quality of used bricks would vary by seller, but on average how good are they?  

If they come from a smoking household can you actually smell the smoke? Is it really even possible for bricks to break or chip? Would it be obvious if I combined used and new bricks together in the same model?
I would suggest that you check with the sellers, as well as their feedback. There is a huge variety and quality of used bricks sold. For some sellers you can't tell used from new at all. Other sellers mention in detail the condition of used pieces; dull color, small chips and scratches, discoloration - most of these are fully functional elements and are perfectly good for general building and play, but might look a bit noticeable when you mix them with shinier new pieces. Then there are sellers who simply separate new from used, and don't mention the condition of used pieces at all. You could get anything from minor scratches to bite-marks and broken pieces. (Yes, LEGO pieces can break.) 

In general, for used elements the acceptable standard is that they are fully functional but they may have some small chips, scratches, etc. that will happen with normal handling and play. Broken pieces, bite-marks, cracks, etc. must be mentioned, although some sellers don't. Also, the fact that sellers deal with tens of thousands of tiny pieces, it is quite possible that even an honest and good seller will have some subpar elements mixed in their used lots.

I would also like to point out that there are buyers who are looking for damaged and discolored pieces. They use them to add variety and interesting detail for such things as post-apocalyptic or battle dioramas. So yes, even heavily used parts sell well, and sellers listing them are not necessarily dishonest or bad - as long as they mention the condition.

Personally I only buy used pieces when it is from a seller I dealt with before and I know their standards. Or when a piece is rare and no longer available in new condition, or would be very expensive new. And I would never buy used white pieces as those are notorious for discoloration. Also, I would suggest that you do not buy from smokers. Smoke definitely penetrates plastic and it is pretty much impossible to get rid of.

Again, the best thing to do is to contact the seller ahead of time and ask them what is their standard for used pieces. Keep a list of sellers (you can favorite them and make notes on them) who you have a good experience with, and avoid the ones who send you pieces you are not happy with. You can also ask on the BrickLink forum for people to suggest you sellers who have decent quality control for used pieces.