Okay, here goes:
To me, along with representing the expansion west, the idealism of the sixties and it's inevitable passing and other themes of americana, Smile symboloized something else. It was a metaphor for Brian himself, and his struggles with artistic genius. I always felt that Margueritte, the girl, was not a girl at all. She was the artist's muse incarnate. This is why although she is killed right at the beginning of the story, she never really dies. The rest of the album is Brians search for her, much like his painful struggle to finish the album against so many obstacles. This is why for me, Good Vibrations is an excellent finale to the album, although I know it's controvercial. He finally cathes her! This is also why I prefer Brian's original title.
So the girl in the picture is the artistic muse, the black figure attempting to embrace her is Brian. The cherubic figures on either side that seem to be "entering" the face are the divine inspiration that Brian received. (My wife is right now reading the book Catch a Wave, and there's a passage where Brian says that when he sat down at the piano to compose he saw little angelic figures circling above him, bringing the music to him. Interestingly, I had never heard this particular quote from him before.)
The dagger that enters the black figure's head between the two cherubs is symbolic of the pain we all know Brian endured at the expense of his genius.
The background is made up of the elements. Sky, water, air. The stars represent fire.