The Vodafone Smart runs Android 2.2 FroYo. It's not the very latest edition of the operating system, as Android 2.3 Gingerbread has been out for some time, but it contains the most crucial update of the 2.x versions - the dramatic speed boost.
This phone has a flat-out old 528MHz processor from Qualcomm. We dread to think how this phone would perform with Android 2.1 on-board, but with the FroYo speed injection it's perfectly serviceable. There's some lag in day-to-day navigation, which we didn't see in 600MHz phones like the HTC Gratia, but it manifests as an occasional jaggy scroll of the apps menu rather than any significant waiting times. The Smart won't be able to take on the latest 3D games, such as Dungeon Defenders: First Wave, but it can cope with casual titles and older 3D games. The processing power won't impede the majority of apps either.
It's a limitation that's not too tricky to get used to, but the screen will pose more of a problem for some. At just 2.8in across, it's small enough to make typing using the virtual keypad tricky more than a little inaccurate when in portrait mode. This will depend in part on the dexterity and size of your digits though, as the touchscreen is a respectable capacitive model - happy to do business with your finger rather than a stylus. The last budget Vodafone Android phone, the Vodafone 845, used a resistive touchscreen, which is difficult to use with a finger at this size.
The Smart 858 also drops the custom UI of the Vodafone 845. This phone comes with a near-vanilla install of Android 2.2 FroYo. A few Vodafone apps come pre-installed, including the Vodafone music and apps Shops, and the Vodafone Updates portal. It's bloatware, sure, but inoffensive as far as bloat goes.
The downside of having only a few custom features added is that you only have the standard widgets to drop onto your homescreens from the off. A trip to the Android Market will solve that though - it may not have all that many stellar apps, but there are enough widgets to satisfy most.
Like most budget Androids with lesser processors, the Vodafone Smart doesn't support full Adobe Flash. It's a basic feature of Android 2.2 but is chopped out of these lower-end phones because their CPUs simply wouldn't be able to churn out Flash content at a decent speed. Another surfing favourite, multi-touch, is also not supported so it's plus and minus buttons for zooming.
Therefore, if you want the full web experience, you'll have to spend a little more. It does come equipped with HSPA mobile internet and Wi-Fi though, so browsing needn't be slow.