There have been a lot of claims about the technical superiority of SmartMedia and CompactFlash over one another, none proved or disproved so far in my "lab."  As far as I'm concerned, I see that SmartMedia is "superior" against CF on a few important issues.  It's smaller, uses about 5 times less power when read/writing and approximately 1000 times less power (depending on who you ask) when it's in standby mode.

There are a number of Flash Memory solutions both from Handspring and Hagiwara Systems.  I use a 16Meg Hagiwara Flash module a lot.  Flash Modules are automatically recognized and useable by the OS.  Most applications can be copied to Flash Memory and ran from there.  As long as an application doesn't write to itself or do anything stupid it will run from Flash.  The FileMover application that comes with Flash Memory will warn you when you try to move a Writeable Database to Flash.  So, I can keep Tetris on Flash, but my Tetris Highscores stay in memory. The rule is, copy it to Flash, and if it works it works, and most do. 

Now, Palm OS4.0 allows something called "VFS" or Virtual File System, that should allow removable storage solutions like SmartMedia and CompactFlash to operate in a similar way while remaining very compatible.  The Palm m500 series includes this support with SD or Secure Digital cards.  Presumably developers for PalmOS 4.0 solutions will be able to create "pluggable file systems" to accomplish this with SmartMedia and CF. 

Currently SmartMedia and CF cards look like disk drives to the Motorola Dragonball Processor, the CPU that drives all current Palm Devices.  Solutions like PiDirect from Portable Innovation and AutoCF from TRGPro will automatically copy an application from a storage card when it's run, then delete it when it's done.  This effectively simulates the behavior of a standard Flash Memory Springboard, but is usually slower.  One unfortunate side-effect of a complex software solution like this is compatibility.  Due to limitations in the Palm OS, AutoCF and PiDirect only work on PalmOS 3.5 devices which is a huge bummer.  I've talked to developers at Portable Innovation and believe me, it's not that they don't want to make a PalmOS 3.1 solution, it apparently isn't physically possible.  VisorCentral will provide more on this issue when it comes in.

As far as speed, I haven't noticed any speed differences using CF or SmartMedia on my Visor Prism.  Presumably this is because both formats are very speedy, but the bottleneck is clearly the speed of the Visor, not the media.  I will say this though, copying a 1 meg PRC can be very fast (<20secs) but copying 20 PRCs at 50K each can take on order of minutes.  Using Backup solutions like the Handspring Backup Module are typically much faster than File-based systems like PiBackup and JackBack's File Mode (not memory image mode) since they have to open and close many databases rather than taking a memory snapshot.