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Continuous exposure to tobacco: Nicotine substitutes for acetylcholine and over stimulates the nicotinic receptor. Then, the receptor is long-term inactivated and its regeneration is prevented by nicotine.

Nicotine rises the stimulation of nicotinic receptors. The excessive and chronic activation of these receptors is balanced by a down-regulation in the number of active receptors. The reduction of the number of active receptors reduces the psychotropic effect of nicotine. Due to the phenomenon of tolerance, the smoker needs to smoke more and more cigarettes to keep a constant effect.
Nicotine activates dopamine systems within the brain. Dopamine is a neurotransmitter which is directly responsible for mediating the pleasure response. Nicotine triggers off the production of dopamine in the nucleus accumbens. A prolonged exposure of these receptors to nicotine reduces the efficiency of dopamine by cutting down the number of available receptors. Consequently, more and more nicotine is needed to give the same pleasurable effect.

After a brief period of abstinence (overnight for instance), the brain concentration of nicotine lowers and allows a part of the receptors to recover their sensibility. The return to an active state rises the neurotransmission to an abnormal rate. The smoker feels uncomfortable, which induces him to smoke again. The first cigarette of the day is the most pleasant because the sensibility of the dopamine receptors is maximal. Then, the receptors are soon desensitized and the pleasure wears off. This is the vicious circle of smoking.

Like acetylcholine, nicotine leads to a burst of receptor activity. However, unlike acetylcholine, nicotine is not regulated by your body. While neurons typically release small amounts of acetylcholine in a regulated manner, nicotine activates cholinergic neurons (which mainly use acetylcholine to communicate to other neurons) in many different regions throughout your brain simultaneously. This stimulation leads to:

Increased release of acetylcholine from the neurons, leading to heightened activity in cholinergic pathways throughout your brain. This cholinergic activity calls your body and brain to action, and this is the wake-up call that many smokers use to re-energize themselves throughout the day. Through these pathways, nicotine improves your reaction time and your ability to pay attention, making you feel like you can work better.
Stimulation of cholinergic neurons promotes the release of the neurotransmitter dopamine in the reward pathways of your brain. This neural circuitry is supposed to reinforce behaviors that are essential to your survival, like eating when you're hungry. Stimulating neurons in these areas of the brain brings on pleasant, happy feelings that encourage you to do these things again and again. When drugs like cocaine or nicotine activate the reward pathways, it reinforces your desire to use them again because you feel so at peace and happy afterwards.
Release of glutamate, a neurotransmitter involved in learning and memory - Glutamate enhances the connections between sets of neurons. These stronger connections may be the physical basis of what we know as memory. When you use nicotine, glutamate may create a memory loop of the good feelings you get and further drive the desire to use nicotine.
Nicotine also increases the level of other neurotransmitters and chemicals that modulate how your brain works. For example, your brain makes more endorphins in response to nicotine. Endorphins are small proteins that are often called the body's natural pain killer. It turns out that the chemical structure of endorphins is very similar to that of heavy-duty synthetic painkillers like morphine. Endorphins can lead to feelings of euphoria also. If you're familiar with the runner's high that kicks in during a rigorous race, you've experienced the "endorphin rush." This outpouring of chemicals gives you a mental edge to finish the race while temporarily masking the nagging pains you might otherwise feel.

Heroin only bumps up endorphins.