At the very least, the wire probably needs to be replaced. Depending how bad the melting of the plastic under the track is, maybe the whole thing.
Once there was a high current condition that started the original heating/smoking, it probably damaged the wire and/or it's connection to the terminals that are clipped on to the "tabs" under the track. covering the possibly compromised wires with tape won't "heal" them, it just means you will have smoke/burning under the tape.
Even if the cause may have been a loose connection at the track the first time, at this point the wire is quite likely damaged as well. So even if you correct the connection to be better, you now may have a new problem with the wire, damaged by the first event.
If it's hot enough to burn/smoke, it very well may have also compromised the connection of the wire to the terminal on the end of the wire.
Stuart's suggestion of using heavier wire is a good one, but it means you need to have the little push on connectors as a part and be able to crimp or solder a heavier wire to make a better connection than the small wire that comes with the Terminal Track as purchased.
-Dave
