Systems Management

It does depend greatly on your infrastructure, type of things you want to achieve, and the effort you want to put into this. In our company, we moved away from SMS to GPO for software distribution. It did take a considerable amount of time to get all apps repackaged into MSI format, but the end result was more than pleasing. We do keep SMS around, mostly for inventory and reporting purposes, but we can abandon it at any time.
In my view, the benefits of going SMS => GPO are:
- cost savings (AD GPO costs you $0.00, whereas SMS costs you >$0.00)
- you no longer limit your choices to SMS - you can switch to other systems management solutions down the road if you choose to
- infrastructure can be simplified (no SQL db, no MP troubleshooting, no service accounts, no SMS client worries). If you are muli-site, all you need is DCs and DFS
- more predictable software distribution. If you set "wait for network" policy, all you need to do after a change is to reboot PC (in case you opt to assign apps to computers), and it'll start installing
- better success ratio (in our case we went from high-80%'es to high-90%'es after doing away with SMS Software Distribution), but it depends on packaging skills and tools you use. With SMS, the big tradeoff is between assigning apps to install when the user is off the system, and expediting deployments with the risks to hit in-use applications. With GPOs, assigning to PCs guarantees that application install/upgrade occurs when the application files are not in use.
- application upgrades, and application removals are handled in an easier and more worry-free fashion, but it's just my opinion

For Software Deployment I would stick with SMS instead of AD/GPO.
Just have in mind that you cannot perform per-user (MSI) installations with SMS.

Good points there revizor, rated you for them.
I still think if you already got an SMS infrastructure it will give you more control over the installation flow then through group policy.

What version of SMS are you using? Older versions were a bit problematic but newer versions work quite well. IMO Group Policy software deployments are messy. They require reboots to initialize and you are limited as to what you can do, SMS is much more robust and has a lot of report, remote control, and other features that are quite useful.