The appropriate use of Smart Objects

Smart objects offer the flexibility to change things later. Using them saves you time, but increases file size. You can save on file size by not using them, but if you're working destuctively then you could spend more time redoing things. So you "pay" in file size or time. My time is more valuable than hard drive space (although upload/download time is something to consider).

---

@CrowMan17821551 wrote:

they're (based on my relatively little experience) the best way to ensure your images stay crisp and that you maintain maximum functionality. That being said, they make for some pretty crazy file sizes. Does anyone have a personal methodology or guide on when it's appropriate to use them?

---

There are several reasons to use Smart Objects (keep original pixel dimensions when resizing, edit camera raw objects, create symbol instances, use linked files…). You’re talking about the very useful ability to keep original pixel dimensions when resizing; to keep file sizes down, make a layer a Smart Object only when you must keep the ability to scale something back up. If you’ll never scale up the size of a layer later, or you know you’ll only scale it down, don’t make it a Smart Object.

Another way to lower your Photoshop file sizes is to use the vector-based Shape Layers whenever possible, especially with graphics that have perfectly straight lines or hard curves. For example, if you want to make a rounded-corner rectangle button and you might need to scale it later, draw it using the Rectangle shape tool, not as a filled rectangular selection of pixels. The Rectangle tool creates a shape layer based on a vector path, which has two advantages: A vector shape layer takes up very little data compared to a pixel layer, and as a vector graphic you can resize it freely at any time and the edges won’t get jaggy.

A psd file that is 600MB? I don't think that is very large. If you want the flexibility to make changes, smart objects are the way to go and "large" file sizes are part of it. Figure out what you really need to keep flexible and rasterize the rest. 

Since Smart Objects allow you to use features of Photoshop that would otherwise modify your pixels permanantly, use a Smart Object any time you want preserve the original pixels.

If you're creating web banners, 600MB is a little on the large side.  If you're creating print material, it isn't.

I use them mainly when I may need to adjust a filter, or transforming.You know that you can rasterize the smart objects when you are finished with your work.