SMO means social media optimization. Here people register into most popular social networking sites and create communities and spreads there products directly or indirectly. For this they need a good and big number of members in the community for increasing the visits and also sales. Today this process is in very good touch, because almost every one who is a internet literate has accounts in atlest 2 social communities sites.
Social media optimization is in many ways a technique of Internet marketing More blogcatalog.com/topic/smo+technique
In SMO you can mainly target for traffic and link backs . Identify what is your goal and choose social media channels accordingly. If say you want to target traffic then you can leverage Twitter, Facebook, digg, myspace and many more community base websites. If you say you are like to target for link back then go for social bookmarking like folkd, content sharing websites like hub and squidoo which can give you a link back.
as my opinion SMO is the Social Media Optimization is the technique which generating publicity through Social Media or online community..
Social networking sites like twitter, facebook also part of SMO techniques...along with this blog commenting, RSS feeds are also SMO techniques..
SMO is the new form of traffic generation in SEO, you could use SMO and look for those users who are really interested in your products and hence can also increase you chances of selling your product.