Hi Kristen, a smart list is just a list of people based on whatever criteria you set. They are dynamic, so each time you look at the list, you might have different people in the list, based on whether or not they meet the criteria you set.
Smart Campaigns are to do something. They use a set of criteria to define the audience (smart list tab), and then the flow tab defines the action that will happen to the audience.
Anytime you're looking to do something, you'll use a smart campaign. Otherwise, if you're just looking for a list of people who meet certain criteria, you can use a smart list.
Hope this helps!