Why would I want to open an image from LR3 as a smart obeject in Photoshop CS5 instead of edit in Photoshop as long as I duplicate the background before doing anything? I then save as a PSD and wheb finished I save as a TIFF.
When you open the image as a smart object (from either Lightroom or ACR) you can at any time in the future double click the smart object layer in Photoshop and it will reopen in Lightroom or ACR.
You can then adjust some settings, click OK and the image will be updated in Photoshop.
As long as you keep the smart object layer intact in your Photoshop layout, you can reopen and adjust things as many times as you feel like.
Only drawback is that files with smart objects get bigger,