Robin hood is correct - SMG is an electronically controlled Manual gearbox that can shift faster than any manual. There's no torque converter as on the automatics/steptronic. The newest M5 has the generation 3 SMG that is the fastest yet.
US M5 owners and owners to-be in the states demanded the manual, so BMW catered to the largest market by providing one. Take a look at the M5 boards.
E93 IL Blue M3 ZPP, ZCW