As far as i understand it Pocket PC and SmartPhone are both based on what was Windows CE. PocketPC phone edition is a PDA operating system with phone features "bolted" on.
SmartPhone is specifically designed for use as a phone, but as it is still based around Windows CE it still has PDA funcitonality (Pocket IE, Pocket OL, high res colour screen etc).
Hopefully that makes more sense
Richie: thats one of the features of PocketPC that was reduced for the phone version. The "standard" screen resolution for PocketPC is 320x220. Stylus input is another removed feature. Don't forget the SmartPhone operating system is designed for one-handed use (imagine trying to reach over witho ne had if the SPV's screen was 2x the width...)