“I’ve got to go out and outscore Sprewell and Houston.”STEVE SMITH

ATLANTA – Three years ago, the Knicks, carrying a loaded wallet and a sparse offense, plunged in the free-agent market searching for a natural scorer for the two or the three. The prime choices were at the shooting guard spot with Allan Houston, Reggie Miller and Steve Smith rated the Grade-A picks.

The Knicks made Houston a multi-millionaire, forever etching him on the hate list of the Pistons while Miller returned to Indiana and Smith headed back to Atlanta.

“It was a situation where we were all looking at each other. ‘Where’s Allan going? If Steve goes here I’m going there or if Reggie goes here …’ We were both approached by the Knicks,” recalled Smith. “The Knicks got Allan and I went back to Atlanta. Everything worked out well. Every guy is happy with his situation.”

And now Smith and Houston are paired against each other in this Eastern Conference semifinals where the Knicks hoped to take a commanding 2-0 lead last night here before the series shifts to the Garden Sunday. To a man, the Hawks spoke of upgrading the defense for Game 2 but, with New York boasting the likes of Houston and Latrell Sprewell who combined to outscore Atlanta’s entire starting unit in the series opener, the Hawks weren’t just waving off the offensive end. They needed scoring.

So that meant Smith would be in the Hawks’ plans and the Knicks’ crosshairs.

“There’s no way one guy offsets those two but I think I had a decent game [in Game 1],” Smith said yesterday morning. “We play as a team. It’s not an individual thing where I’ve got to go out and outscore Sprewell and Houston. “The Knick pair, based on their first game, are suddenly and ridiculously being pictured as West and Baylor or Magic and Worthy or Jordan and anybody. So asking Smith to go one up on the Knicks’ pair is simply unfair. And yet if the Hawks have anything to offset them, it is Smith.

“Definitely, he does [offset them] somewhat,” insisted Hawk teammate Grant Long. “If you watch Steve, he’s one of those players that once the game gets going and it’s intense, he’s going to respond. He always has and I think he always will. He was in foul trouble last time and there’s not a whole lot he can do in that [situation] but … he’ll make amends.”

At first glance, Smith had a good Game 1 with 25 points. But big point numbers in a loss mean little. Smith was virtually negated through foul trouble. He got to the line and banged in 12 of 14 attempts, but he was a mere 6-of-17 from the field. That won’t do it if the Hawks are to upend the Knicks and advance to the Eastern Conference finals. The only way they’ll do that is through a big effort from their All-Star Smith.

“To me, the thing is to just keep playing,” offered Smith who has averaged an Atlanta-best 19.3 in the playoffs. “If I’m playing well, they have to double team me so I just have to go out there play well and try to stay out of foul trouble. My offensive game is always going to be there but I want to stay out of foul trouble so I won’t be such a burden on the defensive end.”

And that, after all, is where the Hawks had to make the most prudent adjustments. They were killed by Houston right, Sprewell left or Houston left, Sprewell right the entire game. Smith was paired against Houston by starting position, logic and ability. Maybe the Hawks could have withstood Houston’s bombardment. But not both. Smith tried to step up in other areas but, well, it’s hard to step up while stapled to the bench with foul trouble.

“Allan’s always been a terrific player but he’s a smart player. You see the guy guarding you has four fouls, you’ve got to take it and that’s what he did and he was going well,” Smith said.