The threads should come out clean unless your tool is improperly set or improperly sharpened. Not enough clearance beneath the top cutting edges can cause the tool to rub on the part, which generates tightly bound smeared roughness. Even a properly sharpened tool will smear the work if it is set with the top face of the tool above the spindle axis centerline. Set the toolheight using one of the lathe centers as a reference.
Cutting dry can also cause torn metal buildup on the tool. For hobbyists, a bit of lard is probably the handiest lubricant to come by for threading.
Another trick is the tool infeed technique: for the first pass, you have no choice but to plunge straight in, but in subsequent passes, you can gain some chip flow control by cutting on only one side of the tooltip at a time. Most guys will set the compound to an angle so that the
axis of the compound is parallel to the trailing edge of the tool, in other words a 60 degree angle to the spindle axis. Or, you might call it 30 degrees if you are an pessimist
Your cutting speed has a lot to do with the smoothness of the cut, as well. But, if you are threading near a tall shoulder manually, its pretty tough to really speed up without crashing
Some guys will get around this problem by turning the tool upside down and threading in spindle reverse so that the tool begins near the shoulder and moves away as it cuts. This method requires an undercut wide enough and deep enough to get the tool tip down in position before starting the cut.
Another trick I have used is to simply cut the thread by manually rolling the chuck over with halfnuts engaged and this gives adequate control to the start/stop points.