Heat, or thermal vision (ThV) is employed by electronic sights, like those normally used by human carapace and powered armor, but it's also a natural feature of various beasts, aliens and monsters. A unit with Heat Vision ignores a set amount of Smoke (in percentage) for the purpose of spotting. This makes smokescreens less than fully effective against many types of enemies.
Note that ThV rating only describes behaviour vs. Smoke, not the actual Nightvision range (NV).