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While SMIL is a fascinating technology with the significant advantage of being under the wing of the W3C, it has teetered on the edge of success for many years without making any significant impact. This may be, in part, due to being supported by only one significant web client - RealPlayer.
Although they had a strong hand to play, Real Media suffered in the CODEC wars of the noughties losing significant ground to both Microsoft and Adobe (Macromedia). While the industry had it's eye fixed on internet media with video on demand being the ultimate prize, few could have predicted the meteoric rise of Web 2.0 and YouTube and the significant investement in network infrastructure from these new kids on the block.
SMIL has not, however, gone away. SMIL has been implemented on handheld and mobile devices and given rise to the subset known as Multimedia Messaging Service (MMS) which is a video and picture equivalent of SMS. While the main battleground is being fought between the heavyweights, Silverlight and AIR, there is still room for an XML driven, lightweight media rich environment. The featherweight contest is now between SMIL and FLEX.