It is a fantastic feature for Chinese Internet users where government has strict regulations and censorship. With Smart Mode, you can use any website or service you want without any worries of getting your IP blocked.
Smart Mode also enables a high level of security for those who want additional protection. For governments and ISPs, it's much harder to detect that you are using a VPN service.
With Smart Mode on, you can use many IM applications and streaming services that block VPN services.
You can also stream local news much faster with Smart Mode.