If you would like an overview of Smart Clients, try this overview, the Microsoft overview, an other articles at the Smart Client Developer Center. For my puposes, a Smart Client is a locally-run application that is connected to part of a distributed solution, and it is capable of functioning when the connection is unavailable (disconnected).
The Offline Application Block (OAB) is a framework for managing a Smart Client's disconnected state. In a nutshell, the OAB checks for connected state, it provides a local cache for data already fetched from the central data source to be available when disconnected, and it provides a queue for sending changes back to the centralized data source when disconnected. The actual implementations of the cache and queue can be in-memory, the local file system, MSDE or Sql 2005 Express, MSMQ, or even something you design yourself.
The OAB utilizes other Application Blocks, including Caching, Data Access, and Exception Management. There are also some Quick Starts that come with the OAB to demonstrate some of the features.
The OAB itself and the on-line documents are available at the Patterns & Practices web site.
Other excellent resources: