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The avatars really shine when you have the browser addon installed - you get a filtered view that shows you which friends have interacted with the item across the web. Surfacing your community like that is a useful piece of info.
I upgraded to the Firefox 3.5 Beta 4 today, and Blue is broken on it (grease-monkey is broken as well). Otherwise, this sounds pretty cool.
I also like the ability to share the content by clicking on "action" - however I think that functionity is a bit hidden. (Though I'm a bit less concerned about the reader sharing the linked content then sharing my content.) I also think that perhaps "Summary" should be the default view when you rollover a Smart link.
there were some page loading issues for me, although that was only a slight lag so not disabling.
You know... at first, I wasnt impressed with "Smart Links" at all. I mean... why not just use an easier service like TechCrunch's MashLogic which makes all phrases into linkes (wikipedia,etc)... but, then I saw this comment, and I realized the value....
Unlike MashLogic which might be really great for users experience, it doesnt help writers to monetize their blogs. This SmartLinks does. And, that makes it attractive for content contributors.
The danger is... that writers start changing the content in order to incorporate books, titles, and in the process steer away readers that become annoyed by product placement plugs.
Innovation suggestion: Imagine if the same tools could be extended to commentators... then, I might just comment referencing a book title, which could have a link, and if someone clicked on it, bought the book...then the commentator would benefit. (same dangers as outlined above would still apply)