can someone please explain what the smartdialer does? THX

Check out the 1st screenshot of the iPhone dialer 7 posts above your own. Smartdialer provides a drop-down list of phone numbers from your Contact list that match the digits you press on your keypad.

THX brightedge, thats no biggie to me if I lose it then because I dont use it anyway.

My understanding is that this isn't quite correct. If you look at that screenshot, it's pulling contacts by the letters in the names, as represented by the digits you pressed, not the digits themselves (The contacts listed wouldn't have phone numbers that start with 726867, but the letters on those keys spell out "Santos," the last name of each contact.) In other words, if you can't remember the phone number, you can simply start dialing the last name of the contact (using the letters on the phone keypad).

Now, it's possible that it will also list contacts with matching phone number digits, but not having a working SmartDial, I can't say. I do think, however, that it is the letter matching that was the main intent.

Yes, it will display contacts that match by letter. It also shows contacts that match by number.