I found the policy on allears.
Smoking Policy: The Sheraton Vistana Resort, Lake Buena Vista does not offer non-smoking rooms. We strongly urge our owners and guests to restrict smoking to the balcony or exterior of the villa. A fee may be charged to cover the expense of restoring the smoke-free environment of our villas.
So it looks like as long as he keeps it outside he should be all set.
p.s. Wanted to add I stayed here with my DS for his first Disney trip in '04. We really liked this resort. Have a great trip.