what is s.m.a.r.t error

SMART stands for Self-Monitoring And Reporting Technology, and is used in hard drives to track the health of the drive. Normally, if you bring up Disk Utility (on your hard drive in applications/utilities), you can see if the drive is verified (means it's OK) or not. You can also download SMART Utility to get more visability into the SMART sensors in the drive.

If you're getting the error while trying to download Mountain Lion, I would bring up Disk Utility per above, and see if it shows as verified. Or use SMART Utility. A SMART error would say your hard dirve has issues, and should probably be replaced. There are some workarounds, however, they tend to be temporary only.