I guess there isn't much of a standard for implementing smart cards in any environment.

Does anybody have a success/failure story about implementing smart cards?

you can integrate smartcards into AD but  i dont think it is as simple installing one application.  there are card readers/software, certificate management, getting the certificates/tokens on the smart cards. its been done though. i think microsoft has some documentation on it.

I have seen some installed at the military recruiters office.

As far as using smart cards for Two-Factor Authentication(TFA), unless the smart cards are being used for things like code-signing, X of Y authentication where a certain number of people have to be present to do something,  or encryption, I prefer the key-fob method.  RSA and a number of others implement token based authentication where you are required to enter both your pin and a token value which changes periodically in order to authenticate.    These types of technologies are implementable cross platform and can tie into things like VPN's and radius fairly easily. 

For things like file encryption, smart cards/USB Keys are really neat.  Combining with two factor authentication with certificates allows for the encryption/decryption keys for files/file systems to live with you.  I like the USB token idea better because if your company is devoted to the solution it's less likely to be left at the office because it's required to check email from home.  The only caveat is, make sure that your PKI implements a key recovery agent for EFS/Bitlocker if you use a solution like that because people will lose these things. 

ChrisC, thank you very much for your reply.  My organization is a bit on the 'slow' side on many things.  We are going to have to impliment the cards due to mandates from Wash DC though eventually.  The cards/system from Gemalto, do you know off hand if it meets with HSPD-12 compliance?