SMB stands for Server Message Block (I think)
To answer your second question, I think that you just need to point the xml file to the shared folder that contains the roms. Here is how I have mine set up:
Just replace with your info and it should work, provided that you do not have a password on the shared folder. FYI - you can also organize the roms using sub-folders: For example, my SNES roms are stored in : //roms/snes9x/roms, whereas my NES roms are stored in //roms/fceugx/roms etc.
Hope this helps!