Yes! You really can use Smart Objects in DesignScape!
First you will need to open up the PSD file by clicking File > Open. The one I’m using is the Travel Mug PSD Mockup from the Plus Hub.
Then find your file and click ‘open’
Over in the layers panel on the right side, double click on the image portion of the layer (not the words).
This will open up a new tab (you can see this one is called Layer 72.psd). You can then drag your image into the DesignScape screen and center it like this:
Those orange guidelines let me know that the file is in the center of this project. After the file is placed how you like it, make sure to save it. You can quickly do this by hitting Command+S (Mac) or Ctrl+S (PC) to save – or click on File > Save.
Then I can click back over to the original file tab and I can see the smart object has been updated with my design!
Now if I want to export my work, I can click on File > Export As > JPG and save. It will then go into my downloads folder for me to use!