Super Metal Sonic (sometimes referred to as Neo Metal Sonic) is a really awesome upgrade of Metal Sonic. One day, Sonic decided to be the moron he is, and started playing with the Chaos Emeralds as if they were toys. In reality, they are not toys. They are collections of Chaos Energy created by the great Wise Ones. But Sonic played with them as if they were toys. But it just happened he was Metal Sonic at the time. When he accidentally impaled the six remaining emeralds into his metallic flesh, he became Super Metal Sonic.
Super Metal Sonic is just like Metal Sonic, except Super Metal Sonic is even more powerful and awesome. Instead of just one Chaos Emerald powering him, Super Metal Sonic has absorbed the data of all seven Chaos Emeralds. With Sonic controlling the robotic body, Super Metal Sonic is a nearly unstoppable force. Just like Superman, except not that unstoppable.
Super Metal Sonic has seen action several times. Most notably was in the Videogame War. During a fierce battle in the Sonic Islands, Sonic wanted to do even more. He decided becoming Super Sonic was not sufficient, so he became Super Metal Sonic instead. Just like Super Sonic, except Sonic's soul is in a metal suit.