SMS stands for Short Message System. As you must already know, it allows you to send a text message from your mobile phone to another person on their mobile phone. I say mobile phone here because the whole world associates SMS with mobile phones; so my definition above it a little but technically twisted: today, you can send SMS using your fixed phone and VoIP phone as well.
Seemingly, there is no compelling reason to use SMS with VoIP, since the rates are practically the same; as they are, they are far from attractive: not less than 10 dollar cents for one message. Some providers in some parts of the world even impose restrictions like a maximum amount of SMSs per month. This appears repelling, since in some other countries, it is close tofree: where I live, I pay around 2 dollar cents (I converted the currency) for an SMS, to any destination, local and international, with no restriction on the number of SMSs.