If it's a question of choosing between Smith and Papelbon, I'd definitely go with Smith because of his age and team-control status.
That said, Papelbon is still a very good closer in his own right. There's really no place for him in our pen, but if we did not have a closer, I would have no problem having him back as our closer, contract aside.
As far as the baggage goes, I don't recall Papelbon ever carrying "baggage" when he played for the Sox. He has not been happy since he went to Philly, but there really weren't any issues when he was with the Sox. Yes, he has an ego. That was a good thing though. That quality helped him to be such a good closer.