do Smart Updates to Sparsed Images mirror the source in size?
 

when I delete something on the source Hard Drive, will a Smart Update delete the same files from the Sparsed Image?

Yes, it will, by definition. Remember: Smart Update is just like erasing the destination, then copying the selected files from the source.

oh, so Smart Update has to rewrite EVERYTHING on the source drive, every night (if it is scheduled everynight), and does not just write to the destination disk the files that are new or changed? that doesn't sound so smart. what does the Smart pretain to?

No, it doesn't rewrite everything. The effect is the same, but the method used to achieve this result isn't.

As it describes in the User's Guide, we only copy those files that are different, and remove the files that shouldn't be there any more.