Originally Posted by
Radhruin_EU
Sauron had, in fact, been the Balrogs' superior back when he was Morgoth's lieutenant, but that was ancient history. He certainly couldn't control beings like that, but he could come to some private arrangement with them (much as he'd come to an accommodation with Shelob). As it was, DB obviously wasn't interested in risking itself for Sauron's glory, but that was seemingly fine with Sauron because that kept Moria out of the hands of the Dwarves and with it, the mithril (he coveted the stuff, he just couldn't get enough of it). Smaug might have been more forthcoming when it came to doing something more useful but that, of course, was why Gandalf had been so keen on him being taken out of the picture. Personally, though, I can't imagine why Smaug would have been bothered anyway: dragons seem to have had simple tastes, a nice cosy lair and a big pile of gold to sleep on. They only got really upset if someone nicked any of their stuff :)
A palantir would only look where you told it to, it wasn't like an early-warning system or anything. The one in Minas Tirith wasn't working properly at the time anyway due to Sauron messing with it via the one he had. Remember, he used it to show Denethor only what he wanted him to see, until the poor bloke decided all was lost and went mad.