What are Smart Meters?
Smart Meters are electronic devices used by utility companies to remotely collect information for billing and operating purposes. They are connected wirelessly to a set of access points also called collectors to form a Smart Meter System.
The System uses a two-way communication technology to collect information, monitor the consumption of energy and control the grid. The System is also known as an Advanced Metering Infrastructure (AMI).

Technican measuring the RF power density from a Smart Meter
Advanced Metering Infrastructure (AMI)
(from Wikipedia July 15, 2011)
Advanced Metering Infrastructure (AMI) are systems that measure, collect and analyse energy usage, and communicate with metering devices such as electricity meters, gas meters, heat meters, and water meters, either on request or on a schedule. These systems include hardware, software, communications, consumer energy displays and controllers, customer associated systems, Meter Data Management (MDM) software, and supplier business systems.
The network between the measurement devices and business systems allows collection and distribution of information to customers, suppliers, utility companies and service providers. This enables these businesses to participate in demand response services.
AMI differs from traditional automatic meter reading (AMR) in that it enables two-way communications with the meter.