You reference the videos in the .smil file relative to the .smil files location.
So, for instance, an application named "vod" with a sub-directory named "test" you would put the .smil (test.smil for example) along with the ABR set of files in the "test" directory. The you would have something like this:
And the playback URL would look like this:
<video src="mp4:bigbuckbunny_450.mp4" system-bitrate="450000"/>
<video src="mp4:bigbuckbunny_750.mp4" system-bitrate="750000"/>
App instance part is only needed when content is located in a sub-directory and you are using one string. HTTP urls are always one string. RTMP players often split the connection part from the stream part, but some don't and in that case you also need to use _definst_ between the application name and the path.