Rick Smit thinks that Smart Clients will mean that he won't have to write Web Forms anymore.
If we're talking about intranet programming, I agree. For most web applications, though, I don't see smart clients as an alternative. In my experience, web apps are written as web apps for reasons that prevent smart clients from being substituted. Smart clients in addition to the web forms is my current usage, so that Windows users with up-to-date machines can use the smart client and the other half of the business world can use the web forms.
Even when Windows 98 is a faded memory and every Windows user has the .NET framework installed (and this is a LONG time from now), installation of the smart client will still pose some of the problems that web/thin client architecture is used to circumvent.
I see smart clients as a technology that will replace client/server and other "fatter" distributed architecture methodologies much more often than it will replace web apps.