Knowing facts != smart. He could claim he is the most well read man in America, but that is about it.
Right. Being smart = smart. Jennings has given no indication that he isn't smart.
However, being very well read and knowledgable isn't what sets Jennings apart, enabling him to dominate the competition almost without effort on a daily basis. There are lots of very well read and knowledgable people, and Jeopardy is where you might expect to find some of these persons.
What sets Jennings apart is the uncanny way in which he seems to command virtually instantaneous recall of all these facts, figures, people, places, things, and events. There are many times where one or both competitors attempted to ring in, their demeanor indicating they knew the correct answer (or question), but alas, Jennings beat them to the punch.
There have been many answers to which I knew the question, but there is no way I could 'retrieve' that information from the 'database' as rapidly or seemingly instantaneous as Jennings can and does consistently. In analogous computer speak, Jenning's hard drive may not contain more data than some of his competitor's, but it has the fastest access times in the industry. ;-)
I believe if Jennings were placed into a format of competition where contestants are given the same amount of time to answer each question (say...10 seconds), the most correct answers at the end of the game determing the winner, Jennings might still do well, but this ability to gain such commanding leads by being the fastest draw would largely disappear.