Smart Objects always output at the resolution set in Photoshop.
Photoshop will only retain vector data created in Photoshop, like Vector Shapes, Vector Masks, and Text Layers.
You're not missing anything: Smart Objects in Photoshop are always rasterized at the resolution of the Photoshop file. There's no way to stop it (except to place the AI logo directly from Illustrator). Yes, I know, it's sad.
It's type and vector Photoshop shape layers that can be "saved" at full vector resolution by saving as Photoshop PDF format.
Oh okay, bummer. :-( I've got one logo that outputs as vector, but I think it probably was originally drawn in Photoshop (not by me). Well, I can place the logo separately in InDesign -- it was just easier to combine it with the image because I always want it one exact spot every time I use this image. But not at low-res. :-(
Place the image in Illustrator then place the Vector logo over the image.
Save it - and when you place the Illustrator file .ai with a pdf compatible file it should be fine.
Actually - you could save it as a PDF with Illustrator editing capabilities turned on -
Just make sure you name your file adequately so you or someone else knows how to edit it.
Or you could place the photo in an InDesign document - and place the vector logo over it there - save the file to your hard drive.
Then do a File>Place and place the InDesign document into your layouts.
Great ideas, Eugene! Thanks!!!