S.M.A.R.T. is supported by all current hard disks and it allows the early prediction and warning of impending hard disk disasters. You should enable it if you want to use S.M.A.R.T.-aware utilities to monitor the hard disk's condition. Enabling it also allows the monitoring of the hard disk's condition over a network.
While S.M.A.R.T. looks like a really great safety feature, it isn't really that useful or even necessary for most users. For S.M.A.R.T. to work, it is not just a matter of enabling it in the BIOS. You must also keep a S.M.A.R.T.-aware hardware monitoring utility running in the background all the time.
That's quite alright if the hard disk you are using has a spotty reputation and you need advanced warning of any impending failure. However, hard disks these days are mostly reliable enough to make S.M.A.R.T. redundant. Unless you are running mission-critical applications, it is very unlikely that S.M.A.R.T. will be of any use at all.
With that said, S.M.A.R.T. is still useful in providing a modicum of data loss prevention by continuously monitoring hard disks for signs of impending failure. If you have critical or irreplaceable data, you should enable this BIOS feature and use a S.M.A.R.T.-aware hardware monitoring software. Just don't rely completely on it! Back up your data on a CD or DVD!
Please note that even if you do not use any S.M.A.R.T.-aware utility, enabling S.M.A.R.T. in the BIOS uses up some bandwidth because the hard disk will continuously send out data packets. So, if you do not use S.M.A.R.T.-aware utilities or if you do not need that level of real-time reporting, disable HDD S.M.A.R.T. Capability for better overall performance.
Some of the newer BIOSes now come with S.M.A.R.T. monitoring support built-in. When you enable HDD S.M.A.R.T. Capability, these new BIOSes will automatically check the hard disk's S.M.A.R.T. status at boot-up. However, such a feature has very limited utility as it can only tell you the status of the hard disk at boot-up. Therefore, it is still advisable for you to disable HDD S.M.A.R.T. Capability unless you use a proper S.M.A.R.T.-aware monitoring utility.