What is a smart switch?
I believe those are switches that can be controlled remotely. The method varies - some can receive commands through power lines, some use radio, some need a separate cable.

You use these when you want to build a "smart house". That is, all the electrical devices can be controlled remotely. For example you could connect to your house from your work through the Internet and turn off the light in the kitchen that you left on. Or you could switch on the coffee maker before departing for home, so that you have fresh coffee when you arrive. Or maybe have your washing machine send you an SMS when the laundry is done. The possibilities are limitless.

The technology isn't anything new, but such devices are still a lot more expensive than traditional electrical networks. They are trying to make it cheaper of course, but it's nowhere near the point where it could be made ubiquitous.

Also they are not problem free. As always - the more stuff there is, the more something can go wrong. And both radio and power-line based communications suffer heavily from noise. Separate cables don't have this issue, but they are difficult to lay out, not to mention expensive. Naturally, progress has been made here as well over the last decades, so the latest types of devices are already quite reliable.

Last but not least - not only are there different methods for communication, but several different protocols as well for each method. So whichever you choose it will severely limit the devices available to you. Of course you could always use the traditional "dumb" devices, but then you'd loose all the benefits of a smart house.