Seems to be a wide variety of experience with this one. Here's my impressions. I've test driven the SMG II in a 2002 M3, the SMG in a Z4, and the steptronic in several late 330i's.
* Steptronic has a slight pause between when you ask it to shift and when it shifts. With both SMGs, the shift is immediate.
* There is a bit of skill involved in getting auto-smooth shifts from an SMG, but when you get familiar with it the shifts are even smoother than a manual because of the way the computer feathers the throttle.
* Reviews I've seen in Bimmer are very positive.
* I've driven manual most of my life, and SMG is much better at shifting than I was at my best.
*SMG and manual feel much better to me in spirited driving because you don't get that "hunting" of RPM when you ease off the throttle. This makes throttle response much more immediate, and gives you control of weight transfer that is very tough to achieve with auto.
* According to my local BMW dealer, M3 is selling about 80% SMG. I believe that as people get more familiar with it, it will become the tranny of choice for us Ultimate Driving Machine types.
* SMG is just fine in stop-and-go traffic.
* YOU CAN NEVER BLOW AN ENGINE WITH AN UNINTENDED DOWNSHIFT WITH SMG!!
Bottom line, I'm totally in love with SMG. I'm currently scheming to buy a new 330 just on the strength of the SMG.
Have fun!