Shuddering & Check Engine Light - PLEASE HELP

Left work this morning to run home, '99 V6 was fine. Ran inside my place, came back out, and I noticed that the car seemed to shudder a bit when accelerating....got on the highway, and the 'Check Engine' light began flashing, and the engine seemed to 'drag' a bit, losing power (especially at lower speeds). When I'd be up to cruising speed, the Check Engine light would remain steady and the engine doesn't drag as much, but when accelerating it'll drag and the light would begin flashing once more. I also smelled something burning (not fuel or oil), and once I parked, looked under the car to see a bit of smoke coming from around the catalyic converter section of my Y-pipe.

Anyone have any idea what on earth is going on with my 'Stang? This came out of nowhere this morning.....please help a fellow Pony owner out if possible?


***UPDATE***

Ran over to Auto-Zone, had a code check done, seems the #3 cylinder is mis-firing. Just replaced the plugs and wires several months ago, but given that the plugs were cheap and I was driving about 130 miles each day (M-F) for a couple of months, maybe it's just the wires?

So I grabbed a screwdriver from the toolbox in the trunk (while still at work), removed the air cleaner assembly, and found the obvious problem - the wire to cylinder #3 had been resting against some sort of horizontal pipe, which had burned a hole right through it. So I got a new set of wires, replaced just that one (the others are fine for now), and the engine is running even smoother than before the problem (I think that one wire had been building up as a problem, and I should note here that the new wire is away from said pipe).

Now, the 'service engine soon' light won't go off....is it supposed to re-set itself, or do I need to have it done (or do it myself, if possible)?