My builder swears by it, although we're using Hardie because we wanted a smooth board and batten finish. The other home they're building right now, nicer than ours, chose it and it looks very, very good (being applied now).

LP makes a smooth option.....

I like it better then cement boards. I think it looks nicer and its a lot easier to cut/work with (not that that really matters to you if they are installing it!)

They make a smooth option but not in the size we needed for board and batten.

Installers do love it. The price for us was the same - one cost more but was easier to install, so the install price was good. The other cost less but was harder to install, so they evened out.

If we go with SmartSide, our next decision is to order it primed or prefinished. The cost is the same after you factor in the painter. Which is better?

Also, I was going to do the fascia with LP, but now I am not sure what to do for soffit? I may switch back to using aluminum for both. Any opinions?

Definately get it primed. I spec most siding products primed because it allows the painter to paint any color one chooses, and also after the siding is caulked, nicks filled, etc. It just gives it an overall uniform color and eliminates the need for touchups on prefinished products. Also like I said, you are not limited to your color choices. However for some (such as my wife) this can actually be a con!
I tend to go with alum prefinished soffits. the reason is for maintanence. Painting soffits and fasica is a royal pain. Plus the fascia see the most water next to the roof, so I prefer an aluminum or pvc product at that location.

Is the warranty better if they paint it (in one of their color options) instead of just priming it?

The Diamond Kote finish option does have a 30 year warranty.