Harbaugh never wanted to stick with Smith and thus why he tried so hard to get Manning.
I think that if you were most teams in the NFL, you would go after Peyton Manning, regardless of your quarterback situation.
Being an avid 49ers fan I break the two down like this
Alex Smith is the type of quarterback who can engineer long drives and run the game efficiently. He needs to be able to work within a system, otherwise he cannot flourish. He has proven he can play good enough to win (with a 19-51 regular season record, 1-1 in the playoffs) but I can tell you that a few of those wins came in large part to their defense preventing other teams from scoring after Smith failed on the previous drive to put the game away. He is a solid, though unspectacular player.
On the flip side, when I watch Kaepernick, I see a gunslinger. He has a cannon of an arm, is elusive and can put points on the board in a hurry. He better utilizes the receiving core than Smith does and I think opens up some room for Frank Gore, too. The 49ers have a fat playbook and Kaepernick has the potential to run most of it quite effectively.
If this was week 3, I'd say Kaepernick all the way. However, is this the time to push him to the forefront, especially when the 49ers are contending for the Super Bowl? HE played great in New Orleans but laid an egg in St, Louis (though I blame some of that on poor play calling from the sidelines). Makes me wonder how he will fair in Foxboro in two weeks when they play the Patriots. I also think back to that playoff game last year against New Orleans, where Alex Smith looked like Steve Young and lead his team to a hard-fought win, then went on to stink it up against the Giants in the NFC championship game.
The quarterback position is a tough one to manage because a lot of it is a "what have you done for me lately" position that impacts the game so greatly. I think I will reserve my answer after the Miami game on Sunday, one they SHOULD win regardless of who starts.