I use SME 5.6 and run a K12LTSP installation. I would try as hard as possible to avoid running them in the same box. E-smith works great when you let it do its thing, and doesn't require a lot of horsepower (we run it on a Dell PIII 500 MHz machine, single processor, 512 MB ram, 80+ users, without problem).
Get the best box you can for ltsp and keep e-smith separate, and I think you'll avoid a whole bunch of headaches.
Robert