I have a 700BT in my tC, which will eventually find it's way into a smart.
I just recently did the 2.0 update and was surprised to find that the claims are true...but not by much. I had already changed my eventsounds to something shorter so it reacted to screen presses faster than OE already. The update did help boot time, tho'....
AVI movies on SD card (mine is class6, but not officially supported) are damn near perfect.
System reset clears contact list, so you have to re-transfer your phonebook.
Bottom line: RECOMMENDED! Just make sure you print out directions.