Two week update.
I've had everything from cut springs to full coilovers on previous cars and will be the first to admit that lowering springs on stock struts/shocks are usually a compromise at best -- compromised ride/handling for the lowered look.
That said, I'm very impressed with the Brabus Bilstein/H&R combo -- no freeway bounce, no banging over potholes and expansion joints, just flatter cornering, quicker lateral transitions with less body roll, and "hands off" stability at speed. The Bilsteins are able to handle the slightly higher spring rates and reduced travel with no problem. Little harder to gauge any effect on handling -- ESP makes it hard to explore the limits. ESP light does seem to come on with greater frequency now though.
The only negative to note is the back end will find the bump stops if I take a big hit at speed -- gotta slow down over the railroad tracks.
http://www.h-r.com/index.php?sprache=en (search catalog for Smart)
Did a little research and looks like H&R may have addressed the above issue. They offer a "cup kit" that includes springs and rear dampers. I suspect the damper has shorter body to address the lack of travel. Will email H&R for more info and US availability.