SmartFolders are used to let you perform advanced searches in archives without having to know anything about the underlying search syntax used by the system.
The managers of the archive may have set up a rich hierarchy of clickable nodes that you can find in the left hand side panel, with meaningful names that help you see what results you can expect when clicking on them.
Navigating SmartFolders works much the same as navigating folders, and is a supplement to the Folder and Taxonomy navigation that may also have been enabled on your archives.
When clicking on a SmartFolder, a search is executed on the server and the resulting assets are shown. The address bar also changes with the URL to the SmartFolder, so you can for example share this URL with your coworkers to guide them to the same content. Also, the breadcrumb above the grid updates to let you easily see where you're at in the hierarchy. Clicking on the Up link takes you one level up in the hierarchy, or you can click on a certain level in the breadcrumb link to navigate there.
Note: All SmartFolder queries are executed in the context of any existing AutoSearch on the archive and access list level. Because different users and groups may have different auto searches associated with them in the archive's access list, there is a possibility that two users accessing the same SmartFolder URL will not see the same content.