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Some self-publishers have used this to offer free books at Amazon, which isn't normally allowed, by setting the Smashwords price to zero.
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I noticed when looking, that the price difference, (when there was a price difference) was always a dollar less at Amazon.
I looked at 'A Land of Ash' which was listed as one of the top 2010 Indie books at 'Red Adept Reviews'. The book (a collection of short stories) was 99 cents at Smashwords and free at Amazon. If the behavior is computer driven and it would not surprise me it appears .99 cents at Smashwords may get cut to free at Amazon. And, if that is the case, does that mean the author loses their royalties?