Both are important, and in fact, these two are helping with each other:
When you have a good ranking, which is very likely the result of your SEO work, you'll find people talking about you more everywhere, including on the social networks, so positive effect on SMO; on the other hand, when hundreds or even thousands of people give their attention to you on the social networks, it's definitely helpful in your SEO and rankings, that's because search engines follow people, when people do like you, search engines do also.
Both SEO and SMO are important for website ranking in SERP's. SEO made both on page and off page optimization means proper content in site and quality backlink for site and in SMO it helps to increase visibility of website it gives social look for site.
SEO is more important. People uses search engine by entering a keyword thus locating your website (once you had optimized it). Whereas, people uses social media mostly to communicate with friends and for networking.
According to me, Both are important. SEO and SMO is a diverse ways to augment your site. In SEO you can do ON page and Off page work. In SMO you can add your business and also offer your industry superiority. You can do SMO like Facebook, Twitter, My space, Bebo etc...