Yeah, sounds like green spot algae to me as well. It's not really that dire, as it's slow growing and rarely takes over a tank. Some amount of algae is to be expected in all aquariums. If you're seeing it spring up/spread often though it's definitely a sign of a nutrient problem though.
As for the smell, is it a rotten egg smell? If so, you need to do gravel vacs as your substrate is becoming anaerobic. Here's a recent thread on that: http://www.fishforum.com/viewtopic.php?t=18384
If not that smell, is it very musty? If so, perhaps the spots are cyanobacteria, which is similar to algae. It's very stinky stuff, and again, a sign of a nutrient problem.
If it's neither of those, it's probably decaying food and/or plant matter. Do a thorough gravel vac and water change, rinse the decorations lightly in tank water and make sure you're not overfeeding. The best solution to all of these problems is regular tank maintenance :D