Dang! That sucks. You'll be hard pressed completely remove 7 years of smoke from the interior without replacing all of the porous surfaces, IMO.
However, I think your best bet for the leather (aside from replacement) is going with a couple of rounds of the Leatherique treatment. Check out this how-to article at DetailedImage.com: Ask-a-Pro -- Leatherique Leather Care How-To
That article tells you everything you need for the Leatherique process. IMO, it's the best leather stuff out there, but I've never used it on a smokey car. Though, it's definitely worth a shot because it's much, much cheaper than replacing your seats.