The SmartDiskII is basically an Apple “Liron” disk controller with the IWM chip replaced by the discrete components from the Disk II controller, which the IWM was originally based on, and using firmware (i.e. SoftSP) which has been appropriately modified to use those components instead of the IWM.
Because the SoftSP firmware (as of v6) is slot-dependent, a different copy is required for each slot the card may be used in. The slot 1 version is in the 1xxx region of the EPROM, slot 2 version is at 2xxx, etc. A set of latches (U9) is used to automatically select the appropriate region depending on which slot the SmartDiskII is placed in.
The card is designed to also work as a regular Disk II controller, though results can be inconsistent depending on the components used. Failures of this system can lead to corrupted floppy disks.
For this reason it is recommended to use true TTL ICs for all of the logic chips. In addition, for the chip at U5, Apple’s original Disk II controller design called for a 9334 rather than a 74LS259. Indeed, using a 9334 does appear to make the circuit more tolerant of these issues.
5.25 Floppy operation works by having the Disk II boot rom in the 0xxx region of the EPROM, and therefore active while U9 is held in reset. Plugging a floppy drive into the DRV1 connector should automatically activate the correct firmware because of the presence of +5V on pin 12, but because some devices do not have that pin connected, you can also close jumper JP8 to force the card into Disk II boot mode.
U8 is the standard 16-sector Disk II state machine data, P6, on a 2716-compatible EPROM.
U11 is a special combination of the Disk II boot ROM and the SoftSP firmware, SmartDiskII.bin.