If I wanted to run just a simple source, preamp, amp, speaker 2-channel system, but wanted to incorporate a subwoofer or two for movies, is this a product I should get? Or am I better off just using the speaker level inputs on a subwoofer and connecting things that way?

The SMS-1 could certainly provide you with a way to get the sub into the mix as well as help dial the sub in, especially with separate pre-amp and amp (you could run the pre-amp outputs to the SMS-1 and let the 80Hz analog crossover trim the bottom off of the left and right channel signals, then run those high-passed signals on to the amp). It's not the only way to do it (a receiver like the RR2150 has bass management built into it, for example), but it would be a pretty effective one. I believe that Outlaw talks about how to set this up in their SMS-1 Guide if you want to see some more detail on how to do it.

Thanks, Gonk...so I'd basically HAVE to use the 80hz crossover setting if I went this route?

I do have a couple of 2.1 preamps in my sights in case I don't feel I can successfully integrate a subwoofer using an analog-only preamp, but the one I have my heart set on is in the latter category. Seems like everyone is steering me away from using speaker level inputs, so I thought maybe this Velodyne device could help. I'm not sure if I'd like the crossover setting that high for music, though....would be fine for movies, of course.

If you go this route, the speakers will be crossed over at 80Hz (that particular portion of the SMS-1's bass management is a fixed analog crossover at 80Hz, so there's no way to adjust that). You could adjust the low-pass crossover for the sub, which is handled in the digital domain and offers very fine control of both slope and crossover point. For comparison, the RR2150 offers bass management with a 60Hz, 80Hz, or 100Hz crossover point. What speakers would you be using?

I have the DeVore Fidelity Super 8s....they are flat down into the high 30s, so I wouldn't want to cross them over any higher than 50hz or so. Right now I have them crossed over at 60 on my 950 pre/pro, but that's because (I think) the next lowest setting is 40hz, which didn't sound quite as good.