"He is obviously Sri Lanka's massive weapon and the way we cope with him is going to be important. We have played against Murali quite a lot now. It still doesn't make it easy to face him. He's a world-class bowler," he said.
"Even though he took wickets in the Test series when we toured there with a lot of our young guys, the guys played him well. That was quite encouraging. I think most of the guys have had a reasonable amount of success against him."
Off-spinner Muralitharan is the second-highest wicket-taker in one-day internationals with 438 scalps, behind only retired Pakistani left-arm fast bowler Wasim Akram (502).
South Africa lost a two-Test series in Sri Lanka last year, but Smith said his team were prepared and ready for the challenge in the important game against Mahela Jayawardene's side.
The last Cup clash against Sri Lanka in 2003 ended in a big disappointment for South Africa, who failed to qualify for the semi-finals after a tied group league match at home following rain.
But Smith said the team had learnt lessons from that game and were now trying to set new standards.
"I remember it being a pretty sad day. I remember the disappointment on the guys' faces when we knew we were not going forward in the World Cup. The team has moved away from that. We have learnt from those disappointments," he said.
"There are some guys who were part of some of those disappointments, but we are trying to set new standards for ourselves, trying to take ourselves to new levels. It's now an important game and the 2003 has nothing to do with it."
Smith said it was necessary do well in early Super Eights matches as his team had not carried points after losing to defending champions Australia in their last group match.
But he was not sure how many matches his team needed to win to make it to the semi-finals.
"It's easy to sit here and plan with six games to go. What we have learnt in these tournaments is that nothing seems to be go according to plan," he said.
"We will just try to keep our focus on this part of the tournament and we know if we can have a successful part in Guyana, it takes a lot of pressure off us going to Grenada and Barbados when we take on other teams.
"Obviously, you would love to come with two points. It makes life simple. But you got to win games in Super Eights and enough games to get yourself into the semi-finals. You know the games you need to win. It's pretty simple."
South Africa may not get enough practice ahead of their big match due to the uncertain weather here, but Smith said his team were mentally prepared for an abbreviated game.
"That (reduced-overs game) might become an issue here. It is something that we have discussed. We might not get a practice in if it carries on raining like it has been," said the South African captain.
"So that becomes very important, making sure that you are mentally prepared going into the game. It is pretty much out of our control, so we try not to worry about that as much as we can.
"I think we have got a lot of options there. We've got options in terms of whether the game is reduced to 20-overs-a-side. Most of our guys are pretty comfortable with it. If that happens, I'm sure we will be able to adapt to it."