It's not a smooth preview, it's a coarse mesh being subjected to increasing iterations of subdivision. On a simple 2D level, it's like applying a 45 degree chamfer to a 90 degree corner, then 22.5 degree chamfers to the 45 degree, 11.25 to that result, and so on, and the Catmull-Clark algorithm specifies what happens, how many vertices/faces are created, and where they're to be at each iteration, so that you don't have to. A square becomes a progressively better approximation of a circle, a cube becomes increasingly closer to spherical, for example. Low-level editing is snappy, because with a coarse control frame the app shuffles relatively few transformations through memory, it slows down the higher you go, but with the smoother result, which is a physical difference, not a simple preview fudge.
You can combine SubD objects and solids, but the SubD sections will be faceted. Even if they're fine resolution, they can't be recognised as curved surfaces, so they can't easily be blended, and their edges and vertices will affect the success of shelling and other utilities. The mesh-to-nurbs capability being introduced with the VCP/FX PowerPack is what's intended to make that possible.