The second generation smart fortwo clearly shows that Mercedes listened and responded to many of the shortcomings of the first generation model. Improved handling, interior build and materials quality combined with totally redesigned petrol engines (or improved diesel engines) and gearbox transforms the car, making it even more fun to drive, even if the more sedate (but equally more upmarket) dashboard and switchgear takes away some of the car's funky, oddball credentials and reminds you that this model has had more direct Mercedes input than its predecessor.
The new petrol engines are not quite as fuel efficient as those that they replace, however the expectation - hence trade off - is that they will be more reliable in the long term by not requiring a rebuild mid-life as has been the case with many first generation model engines. Moreover they offer substantially increased levels of torque and refinement.
Build quality and reliability still needs to improve however, as does the performance and attitude of many Mercedes dealerships. Servicing is still horribly costly at main dealers and smart drivers are treated as a poor relation of Mercedes owners by many staff. The car is too expensive given the wealth of competition in the small car market these days and Mercedes really needs to up the ante on the innovation stakes for the third generation unless it wants this most iconic of modern cars to be consigned to the history books of "the noughties".
I would happily buy another though I would not buy the same engine (71bhp petrol), instead I would either go for the new 54 bhp diesel engine (for economy) or the 84bhp petrol engine (for fun/performance on motorway!). I might also wait to see what the upcoming 4 seater smart is like, this being a long overdue model.