  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.
