My most favorite car ever was a 1994 Geo Metro. At the time, I actually knew nothing about how driving technique affects MPG - so I drove like a bat out of hell. I still got 50 mpg.
The second best part of the Metro was the ability to grab parking spaces others were forced to pass up (a real benefit in congested Washington DC, where I was living at the time). The Smart would be even better in this regard.
That said, one does have to factor in the utility of a vehicle, not just MPG, when considering its efficiency.
I lived in Thailand, and drove a scooter that got 145 MPG (also without trying.....). However, is it fair to compare a scooter with a car?
Likewise, we wouldn't compare the fuel efficiency of a tractor-trailer (4-8 MPG) to that of a car, for what seam to be obvious reasons. In fact, tractor trailers, given their carrying capacity, are actually extremely efficient - probably more efficient than any passenger car, in terms of fuel consumed to carry a given weight over a given distance.
In the same way, its not really fair to compare a Smart to a VW - VW's can carry 4 to 5 people, a good bit of luggage, and still get 50+mpg.
This is also where the "Miles per Gallon" versus "Gallons per 100 miles" would be very instructive.
Don't have time to do the math - but you'd find the absolute fuel savings of a 65 MPG car over a 50 MPG car aren't really that much. Both sip fuel.