Have you even bothered consulting the Help?
Anyway, the advantages of Smart Objects are numerous:
• multiple instances of a SO in a containing document that update simultaneously on saving an edited SO (please note that a SO once placed has no connection to the external file but resides inside the containing document)
• the possibility of placing vector content as Vector Smart Objects (though this will output as pixels)
• non-destructive application of Filters
• non-destructive application of transformation, warp, puppet warp (not all of these are available for Vector SO, but by converting such a one to a regular SO they become applicable)
• combination of elements of different color spaces
• the ability to Replace Contents of SO (for example when faking as-of-yet non-existent products by mapping packaging design elements onto images of a blank container and the design is likely to change)
• Stack Modes for certain combinations of photographic images
thanks for your prompt reply.
For example when doing montages some people do touch-up on the down-scaled elements – which ensures that if those elements are later needed in larger sizes one can chose between doing the touch-up again or unnecessarily diminished image quality.
And the argument that when doing the edits in a full res Smart Object one lacks the ability to immediately judge the effects in the final surroundings seems unimpressive to me when compared to the benefits.
But then I work for advertising a lot and I tend to assume that customers may change their minds on anything, from the combined element to colors to sizes in an image, at any time, even years later, so adhering to non-destructive editing principles can pay off in the long run.