To get a smooth waveform, try to have more samples within the one cycle of sine waveform. Changing the number of samples within a cycle implies changing the sample time.
You can try changing the Sample time value in the Signal Attributes tab of Waveform Generator block, to have a smooth waveform. The Signal Attributes tab lies side to the Main tab of Waveform Generator mask.
You can set the Sample time to 1/5000 and observe the smooth waveform for the sin(2,1000,0).
Hope this helps,