Smart Tags are a Microsoft technology that can automatically turn words into link-like entities on HTML pages, without the web page author's consent or even knowledge, and potentially without the viewer's consent or knowledge. (In the proposed implementation from Microsoft, the user could shut off the Smart Tags if they like, but they were on by default. A certain large percentage of users would never know they could be turned off, or even what they were, so for many people the effect would be that they were on without even their knowledge.) For instance, if the word "Ford" appeared on the page, it might add a link to the Ford homepage, or a page with information about Ford stock, or anything else Microsoft thinks might be a good idea... even if the word was used in the context of "fording a river".
The definitive article on Smart Tags is probably from A List Apart. Note the parallel between the Microsoft's quote and the arguments in favor of annotation, framing them in terms of "user empowerment" to the exclusion of "author empowerment", as if there was a meaningful distinction between "users" and "authors".
This isn't quite annotation, but it's about as close as you can get without actually doing it, and it does demonstrate how large companies will swiftly co-opt that sort of technology if given the chance, and turn it into anything but a way for the little guy to "strike back". The technology is very similar to Third Voice, though a little more sophisticated and flexible (more then one central server, more flexible client manipulations). Adding new "Smart Tags" is limited to developers, since it would require programming, which practically means it is limited to companies since most "normal users" aren't programmers. "Smart Tags" were going to be used for the very things Third Voice was supposed to counterattack.
"Smart Tags" do nothing for the users that they could not already do for themselves; if one is reading about greyhound dogs and suddenly has the urge to look up the stock value of the Greyhound Lines, Inc., they can do it for themselves plenty easily without assistance.