When we bought our house, we had a chimney sweep come to clean the chimney and check it for safety. When he was done, he handed me a singled sided xeroxed page from a chimney sweep industry magazine that explained how to build the cleanest burning fire practical in a traditional fireplace.
It's simple, and it works. Rather than piling up your logs, putting the kindling and tinder below, and igniting them, you invert the arrangement. The principle is to have the hottest part of the fire at the top, so the hydrocarbons in the smoke are hot enough to combust fully. Radiant heat from the fire on top is enough to start decomposing the unburned wood below. A bottom up fire is great for making lots of smoke, by getting the wood on top hot enough to smoke, but not hot enough to burn well. The inverted fire isn't smokeless, but it is dramatically cleaner. Inverted fire arrangements also works well in an outdoor firepit.
The disadvantage is that its difficult to refuel and still maintain the clean burn. What I usually do is push any embers and partially burned wood to the side, put new logs on the bottom, and then shovel/move the remains of the old fire to the top of the pile.
Traditional open hearth fireplaces are horribly inefficient on three fronts: they don't burn the fuel efficiently, they don't recover heat from the fire efficiently and because they draw heated indoor air for combustion, and then a lot more of it in order to ensure a good strong draught. There is an old design called the Rumford that improves things, by, in part, reducing the amount of air pulled from the house to maintain a strong draught in the chimney. A glass door and an inlet for air from the outside reduces the heat pulled from the house further. Adding a heat exchanger improves heat recovery. Some people have built "dragon stoves" that are good enough at recovering heat that condensation and poor draught become a problem (much like an ultra-high efficiency gas furnace.
As for the rant about heating with wood not being "sustainable," or "renewable" the answer is simple: Language involves ambiguity, particularly when a single word substitutes for a much larger concept. Assuming that everyone else shares your definition is not wise. As is often the case, the robustness principle (aka Postel's Law) applies: "Be conservative in what you send, be liberal in what you accept."
To that end, in this context I'll suggest that for something to be "sustainable" or "renewable" it doesn't have to scale to support everyone in the world (or in a country), the status quo alternative certainly doesn't. In my urban neighborhood of mostly single-family detached homes, some people heat with kerosene, others with vegetable oil, others with heat pumps powered by electricity (mostly hydro, though our utility also uses as much wind as it can, and a lot of people have added PV solar) others with resistive electrical heat, and a few, with wood.
Don't get me wrong, I hate how insufferably smug and clueless some people can be once they start using some renewable energy that can't possibly scale to meet a significant portion of energy demand (like biodiesel made from food waste).
Still, its clear to me that burning wood or other biomass is viable enough in some regions as to be economically sustainable as well. I think most often, the feedstock are byproducts of other industries, primarily sawdust and wood scraps from lumber mills. On a small scale, people practice "coppicing" to improve sustainable yields from wood lots.
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