Soak wood chips in water 30 minutes; drain.
Prepare grill for indirect grilling, heating one side to low and leaving one side with no heat. Maintain temperature at 200° to 225°.
Place wood chips on hot coals. Place a disposable aluminum foil pan on unheated side of grill. Pour 2 cups water in pan. Place grill rack on grill. Fold a 24 x 12-inch sheet of heavy-duty foil in half crosswise to form a 12-inch square. Fold edges of foil up to form a rim. Coat foil with cooking spray. Place foil tray on a baking sheet; arrange onion and garlic on foil tray. Carefully place foil tray on grill rack over foil pan on unheated side. Close lid; cook 1 hour and 15 minutes. Carefully remove foil tray from grill; place on baking sheet.
Heat a large Dutch oven over medium-high heat. Add onion mixture, thyme, tomato paste, and pepper; cook 1 minute, stirring constantly. Add sherry and broth; bring to a boil. Cover, reduce heat, and simmer 1 hour.
Ladle about 1 cup soup into each of 6 ovenproof soup bowls. Top each serving with 2 toast slices and 2 tablespoons cheese. Broil 3 minutes or until cheese melts. Serve immediately.
Wine note: While this recipe is fairly simple, it possesses three challenging flavors when it comes to matching wine: smoke, onion, and garlic. Most white (and red) wines simply won't stand up. So do as the French would, and drink bubbly. The sprightly texture and crisp freshness of a good sparkling wine will partner with the soup famously. A good value is the Gloria Ferrer Sonoma Brut from California, about $18. -Karen MacNeil