In light of recent events with Sal ("Wee Small Hours of the Morning"), I decided to watch "The Jet Set" again.
Smitty clearly knows the repercussions of Kurt telling everyone that he's gay. During the big revelation, notice the concerned look on Smitty's face when everyone starts teasing Kurt and Peggy. He knows that Kurt's going to say something (I assume he's done something like this before), and he knows how unwise it is. After Kurt's announcement, Smitty even tries to warn him not to say anything else, but of course Kurt clarifies things further: "I make love with the man, not the woman."
You're right,
QAF Rocks, Smitty gets a worried look on his face right away. I think he's being really protective of his friend - maybe he knows with this crowd, it's not going to go over so well. But then of course Kurt is so innocent really about just blurting it out. He obviously sees no need to hide it from anyone.
I like how when the others start in making comments (Ken especially with his remark about he really hadn't wanted to work with anyone gay), Smitty is not afraid to say that he can't believe they've never met anyone homosexual in advertising. And then he walks out kind of shaking his head in disgust (taking a box of donuts, LOL). That's what I love about him - he's really audacious and not afraid to speak his mind when the situation requires it. I noticed that too in other scenes. For instance, showing disdain that Ken and Pete didn't plan things better ("My Old Kentucky Home"), or voicing opposition to their holiday being cut short ("Guy Walks Into An Advertising Agency").
He's an outsider at the agency (along with Kurt), and although he can be social and charming when the occasion calls for it, he also doesn't mind letting the others know when he isn't thrilled with their behavior. I think he seems more willing to do what he feels is right then to go along with the crowd.
But then, as we saw in "The Wee Small Hours," he's also a good team player when he has to be - he seems to work well with Peggy and he was affable with Don (despite Don's general pissiness with everyone).
All in all, I think Smitty is one of the best characters we've seen at SC lately. And I still hope he and Peggy get romantically involved, but in the meantime I like seeing them working together and being potential friends.