First of all, i'm sorry my english can be pretty bad as i'm french and lazy. Too lazy to check my english grammar mistakes.
1. Smile detection
If smile detection a real need. I suggest using Processing. If you really need to make the project pocke sized, then yeah you should probably use a Raspberry instead of an Arduino. Depending on the size / brightness / positions of your attendees, you might have a hardtime to achieve this right.
Here's a smile detection library for Processing : Smile detection library (Processing). Read the comments for proper configuration.
2. My suggestion / alternative
If you're planning to do this in a movie theater or during a one man show. I think you should investigate on decibel measurement. 40 people laughting are way louder than 2, especially in a large room.
It is way simpler to achieve than smile detection with a large number of attendees and it's a good alternative for whaty ou want to achieve.
For proof of concept, you can check out this Adafruit tutorial on measuring sound levels : Adafruit Sound Levels
If you need a large display with specific artwork when you reach an exact decibel value, you can couple Arduino with processing.
Arduino send db value to Processing over serial port. If db value is higher than xx decibels ... Then, do this (Dispay LOL for exemple) !
Some documentation about connecting Arduino to Processing
I hope it helps,