I've always wondered about this. I did a Google search to find the Holy Grail of iPad covers compatible with the Smart Cover. The following have their own pros and cons:
1. ZUM Ultimate SC case - Pros: Comes in nice translucent colors that allows the Apple branding to show through; it locks the Smart cover in place (which is a con to some); made of a smooth rubbery texture for an easy grip; it's precision cut and the most durable of all cases. ZUM logo matches Apple's logo and fonts. Cons: No magnetic strip on back to prevent the cover from flapping.
2. DeviceWear Union Shell - Pros: Comes in nice translucent colors that allows the Apple branding to show through; Has a built-in magnetic strip on the back to keep the Smart cover from flapping when folded back; made of a smooth rubbery texture for an easy grip; fits snugly and is also very durable. Cons: Does not lock the Smart cover in place (which may be a con to some for those who want to easily detach the cover); Devicewear's retro logo on magnetic strip doesn't match that of Apple's more modern branding (but that's nitpicking).
The other two worth mentioning are the TuneWear Eggshell only because of the super thin 0.9mm thick and super light 58g weight, and the InCase Mag Snap case with it's noteworthy feature of including two magnets on the back where the second magnet functions to create a stand angle that is roughly halfway between the viewing and typing positions. Those features are not enough though for the price they are asking for, considering the other flaws that they have.
One of these companies should be able to combine the best of all worlds and come up with the best back cover for iPad compatible with the Smart Cover.
I most certainly like the ZUM case the best and would have bought it in a jiffy if only they have a magnetic strip. The DeviceWear therefore is the next best for me. Although it doesn't lock the Smart cover in place, it's not much of an issue because one never holds the iPad by its Smart cover (unless you're a child that doesn't know better) but it's a nice feature as one will never have to be self-conscious about accidentally detaching the cover. I just wish that the black is translucent like that of the ZUM case to show the Apple logo. My next color of choice then would be the clear frost.