Noncommutative smoothness and coadjoint orbits

Raf Bocklandt and the author have proved in math.AG/0010030 that certain quotient varieties of representations of deformed preprojective algebras are coadjoint orbits for the necklace Lie algebra of the corresponding quiver. A conjectural ringtheoretical explanation of these results was given in terms of noncommutative smoothness in the sense of C. Procesi. In this paper we prove these conjectures. The main tool in the proof is the etale local description due to W. Crawley-Boevey in math.AG/0105247. Along the way we determine the smooth locus of the so called Marsden-Weinstein reductions for quiver representations.