I'm sorry to read about the quality issues with the new Smart Case as I was just looking at photos of it and thinking about trying it out.
For anyone looking for an alternative, I can recommend using the Smart Cover (not the Smart Case) with the Cover Buddy by SwitchEasy:
I have the iPad 2 version and have been using it daily for almost ten months. I love the Smart Cover but I was desparate for something to make the back of my iPad less slithery for classroom use. The CoverBuddy (in the colored, not clear, versions) is a rubberized material (over a thin, rigid shell) that makes the iPad very easy to hold. It's also well-engineered and fits like a dream. An unexpected bonus is that it does provide protection at the corners. I wash both of them from time to time with mild detergent.
I'm amazed at how well both have held up with heavy use in the studio, outdoors, traveling, etc.
I bought one for my iPad 2 the other day at an Apple Store, and my out-of-the-box impressions were not positive either. It would be nice if the cover were absolutely flush with the iPad. But after living with it for a day or so, in different positions, applications and places, I'm beginning to get quite used to it. It's pretty sturdy for a thin case, provides full coverage while still flying the Apple flag, and my hands have adjusted well to the feel of it in several different use-positions. I had the Smart Cover before, and it's nice now to not have the cover detach unexpectedly from the iPad. So I guess you can count me as pretty satisfied with my purchase.
I actually ended up talking with AppleCare about the product and its warranty. They didn't know off-hand, so I had to wait 20 minutes so they could find it. The Smart Case has a limited 1 year warranty on any defects and craftsmanship. So, I ended up returning my original case and got a new one. So far I enjoy it much more as it feels tighter and the iPad is less prone to move in the Smart Case. Still have the gripe about opening it though. Only flaw.
Link to Apple Accessory Warranty page (in case an Apple Genius gives you a hard time in the store about exchanging).
I also have the iPad 2 version and just received my new smart case from apple but the case is way too big for the iPad 2, here is same issues on the blog
I think I need to exchang.