Yes, this is okay, as of October 5, 2013. (I'm a developer at Smashwords.)

From the Site Updates page:

"Charles Dickens is smiling. We updated our Terms of Service yesterday to allow short serials. We had already relaxed the prior prohibition quite a bit over the last year, because we never felt comfortable making subjective judgements between what was a serial and what was a series.

The original policy was put in place based on reader feedback, and out of a desire to prevent specific types of abuses, such as a writer taking a full length novel and releasing it as 50 serialized ebooks one 2,000-word chapter at a time. Or writers releasing unedited works-in-progress that were never completed. Although rare, we have seen writers do both of these things, and it's clearly not a good customer experience. However, I do think serializations have their place in the hands of responsible writers, and I believe 99.9% of writers are responsible and do want to serve their readers with a high-value experience. So after much contemplation, it became clear that we were unfairly limiting the flexibility of the many to protect readers from the few. In in end, the decision was easy. Our motto is, "Your ebook your way."

I created Smashwords to open doors, not close doors. I created Smashwords to give writers the freedom to publish what they want, and give readers the freedom to read what they want. The Smashwords author is the publisher. The author is responsible for reader experience, and will be held accountable by their readers. If they serve their readers well with great, well-packaged writing - whether it's a serial, series, short story or full-length book - then we're all the better for it. This decision was also made easier by the launch last month of the Smashwords Series Manager, a great tool for authors that helps readers identify all the books in a serial or series.

If you write serials, each episode's cover should be different, even if the only difference is a numeric label such as, "Episode 5." Beyond that, recommended best practices include:

1. Link your serials within the Smashwords Series Manager.
2. Clearly identify in your description that it's a serial so you avoid disappointing customers who might think they're purchasing a full length book.
3. In your book title, consider mentioning the episode or part number, such as "Episode 5," or "Part II," etc.
4. Decide in advance how many episodes you'll be releasing. Make a schedule, communicate the schedule to your fans, and stick to it.
5. Release multiple episodes at once to kick start your readership.
6. Use our new Preorder feature so your fans can purchase upcoming episodes now, at the moment you have their attention and interest. If you want a great example of preorder serials, check out Ella Ardent's new Dangerous serial, three parts of which are now available on preorder at Apple and others."

Yes, this is okay, as of October 5, 2013. (I'm a developer at Smashwords.)

From the Site Updates page:

"Charles Dickens is smiling. We updated our Terms of Service yesterday to allow short serials. We had already relaxed the prior prohibition quite a bit over the last year, because we never felt comfortable making subjective judgements between what was a serial and what was a series.

The original policy was put in place based on reader feedback, and out of a desire to prevent specific types of abuses, such as a writer taking a full length novel and releasing it as 50 serialized ebooks one 2,000-word chapter at a time. Or writers releasing unedited works-in-progress that were never completed. Although rare, we have seen writers do both of these things, and it's clearly not a good customer experience. However, I do think serializations have their place in the hands of responsible writers, and I believe 99.9% of writers are responsible and do want to serve their readers with a high-value experience. So after much contemplation, it became clear that we were unfairly limiting the flexibility of the many to protect readers from the few. In in end, the decision was easy. Our motto is, "Your ebook your way."

I created Smashwords to open doors, not close doors. I created Smashwords to give writers the freedom to publish what they want, and give readers the freedom to read what they want. The Smashwords author is the publisher. The author is responsible for reader experience, and will be held accountable by their readers. If they serve their readers well with great, well-packaged writing - whether it's a serial, series, short story or full-length book - then we're all the better for it. This decision was also made easier by the launch last month of the Smashwords Series Manager, a great tool for authors that helps readers identify all the books in a serial or series.

If you write serials, each episode's cover should be different, even if the only difference is a numeric label such as, "Episode 5." Beyond that, recommended best practices include:

1. Link your serials within the Smashwords Series Manager.
2. Clearly identify in your description that it's a serial so you avoid disappointing customers who might think they're purchasing a full length book.
3. In your book title, consider mentioning the episode or part number, such as "Episode 5," or "Part II," etc.
4. Decide in advance how many episodes you'll be releasing. Make a schedule, communicate the schedule to your fans, and stick to it.
5. Release multiple episodes at once to kick start your readership.
6. Use our new Preorder feature so your fans can purchase upcoming episodes now, at the moment you have their attention and interest. If you want a great example of preorder serials, check out Ella Ardent's new Dangerous serial, three parts of which are now available on preorder at Apple and others."

You should note, however, that if this is PLR content (e.g., someone ELSE's blog, and you bought the rights), this is strictly not allowed.