The most significant difference is the type of scenes the algorithms are typically used with, and the way they represent the 3D shape of the object.
Volumetric approaches perform best...
- with a large number of images...
- taken from different viewpoints, well distributed around the object,...
- of a more or less compact "object" (e.g. an artifact, in contrast, for example, to an outdoor scene observed by a vehicle camera).
Volumetric approaches are popular for reconstructing "objects" (especially artifacts). Given sufficient views (i.e. images), the algorithms give a complete volumetric (i.e. voxel) representation of the object's shape. This can be converted to a surface representation using Marching Cubes or similar method.
The second type of algorithms you identified are called stereo algorithms, and graph cuts are just one of many methods of solving such problems. Stereo is best...
- if you have only two images...
- with a fairly narrow baseline (i.e. distance between cameras)
Generalizations to more than two images (with narrow baselines) exist, but most of the literature deals with the binocular (i.e. two image) case. Some algorithms generalize more easily to more views than others.
Stereo algorithms only give you a depth map, i.e. an image with a depth value for each pixel. This does not allow you to look "around" the object. There are, however, 3D reconstruction systems that start with stereo on image pairs and combine the depth maps in order to get a representation of the complete object, which is a non-trivial problem of its own right. Interestingly, this is often approached using a volumetric representation as an intermediate step.
Stereo algorithms can be and are often used to for "scenes", e.g. the road observed by a pair of cameras in a vehicle, or people in a room for 3D video conferencen.
Some closing remarks
- For both stereo and volumetric reconstruction, graph cuts are just one of several methods to solve the problem. Stereo, for example, can also be formulated as a continuous optimization problem, rather than a discrete one, which implies other optimization methods for its solution.
- My answer contains a bunch of generalizations and simplifications. It is not meant to be a definitive treatment of the subject.
I don't necessarily agree that smoothness is easier in the stereo case. Why do you think so?