My wife is a city planner of the sort that the first answer refers to. According to her, smart growth, at least in the context of the US, means building cities with higher population densities and less "sprawl."
If cities do this, then people will be closer to the places where they work, shop, play, etc. This means you need to have businesses, homes, parks, and industry all relatively close together. This will allow for more walking and biking instead of driving. Higher densities will allow for more transit because more people will live within walking distance of bus or rail lines. All of this will lead to a decreased dependence on fossil fuel.
So the core idea of smart growth is to use fewer resources. To do that, you need to keep cities relatively compact so that less driving is required. This means having businesses and even industry closer to people's homes and it means having more apartment buildings and fewer single family homes. This is one reason why it is so hard to get places to follow smart growth principles.
If you follow the first link below, you can find the US EPA's 10 principles of smart growth.
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