HTML vs. SMIL video
From what I gather the basic difference is that HTML5 provides a video player capability and SMIL provides a way to synchronize a video with other timeline based content.
SMIL has features like <par> for parallel playing and HTML5 provides features such as the volume DOM attribute for volume control which make sense for a video player control.
It has been suggested that HTML <video> can reference a SMIL file. (Not sure I want HTML <video> to support more than a limited set of formats though for ease of authoring and deployment.)