It allows Xbox owners to remotely control their media, navigate through the Xbox dashboard, and more -- including the ability to use the iPhone's keyboard to type messages on the Xbox. SmartGlass has deeper functionality as well:
More exciting than this beefed-up interaction with the Xbox Live service itself is that Xbox SmartGlass is also "smart" enough to recognize when you're playing certain Xbox 360 games that offer additional content, and will display said content on your iOS device giving you that "second screen" enhanced experience that seems to be all the buzz as of late.
Article Link: Microsoft Releases 'Xbox SmartGlass' for iPhone and iPad