The output of the Contour filter is not any more smooth than Iso Volume. It just looks that way because the Contour filter is generating surface normals that provide smoother shading during rendering.
If you add the Extract Surface and then Generate Surface Normals filters to the output of Iso Volume, you will see that the added normals make the result look the same as Contour. Likewise, if you change the representation of both to Surface With Edges, you will notice that the two filters provide surfaces with the same facets (except that Contour triangulates its surface).