Operating system and graphics card - Windows 7, Nvidia GeForce GTX 650
Broken: 2.72 95182d1
Worked: 2.71, but when using "true" displacement with Cycles, issue arose.
Setting an object to smooth shading works in solid view, but switching to rendered view reveals faces. I observed this problem in the previous version when experimenting with True displacement in Cycles, but assumed it was an issue with that feature being still in development. Now even when using default 'bump' displacement in rendered view, individual faces are evident.
Create UV sphere, add subsurf modifier at level 2, switch to smooth shading, go to rendered view.