If you're new to Photoshop, Smart Objects can seem a bit foreign, but they're extremely helpful when you're doing certain kinds of work. This informative video will show you five reasons to consider using them when you're working in Photoshop.
Coming to you from the Adobe Photoshop team themselves, this helpful video will show you some of the biggest benefits of working with Smart Objects in Photoshop. If you've not heard of them before, a Smart Object is a layer that uses data from either a raster or vector image while preserving the original information. This enables a multitude of capabilities, such as the ability to perform geometric transformations on the layer nondestructively (and thus, undo them without penalty) or use filters nondestructively with the ability to update their settings whenever you please. On the other hand, you can't do anything that changes pixel-level information in a Smart Object, such as using the Clone Stamp tool or dodging and burning, as it would need to be rasterized first. Nonetheless, for layers on which you won't be doing any pixel-level editing, they can offer you an additional bit of flexibility. Check out the video above for a good walkthrough of their usefulness.
The big problem with so called smart objects is that they make your files "heavy" and they're more taxing on your system. This is because they're essentially sub-composites in container files. This becomes especially problematic when you have multiple smart objects in your Photoshop file, even more so if your image is high res. I will typically use one for parametric filtration, but really Adobe should just trash the existing "filter" specification and make them all parametric without the need for so called smart objects, which is a process that's not really all that smart at all.