Are there issues while using a Smart Cover for the iPad 2 arising due to the fact that the cover only covers the front?
(Not a buying recommendation, just a question about a specific plausible issue with a peripheral.)
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One of the main reasons people would go with a Smart Cover over a full case is to avoid adding extra bulk. The Smart Cover provides good protection for the screen at a minimal size/weight cost.
I use an iPad 2 with a Smart Cover daily, and it's really a great alternative to a case in my opinion. To provide extra protection without bulk, I have added an InvisibleShield (thin scratchproof film) to the front and back of the iPad.
That said, if you are clumsy or will be using your iPad in more hazardous environments, you should probably go with a full case.