I dual box as well, sometimes on one machine and sometimes on two. Either way I use Keyclone and would recommend it. For me it removes most of the downside to multi-boxing; that is all the switching from one client to another. I think the first thing you want to know is what kind of difference it will make in a typical play-session. If you set it up with picture-in-picture (very easy) then you'll be playing as though you are controlling one character who's capable of doing the actions of both. The exceptions are of course that a.) you need to loot with both toons (easy with picture in picture - just point and loot in the small box) and b.) all of your quest interactions have to be done by both characters (good news! the addon Jamba can take care of this, along with a dozen other things like flight paths, selling, repairing, autofollow, chat etc).

Speaking specifically about the character setup, it's as simple as pressing '1' will activate your hotkey on both characters. For example, if both characters have an opener then make sure they use the same hotkey. Frequent bread and butter attacks could be bound to the same key as well. I haven't played a pally since vanilla WoW, but I'm currently under the impression that they don't have a standard rotation; if that's the case then it will be slightly more awkward for you to set this up.

As for your macro, I think you're missing both a count and reset with end of combat. That way it will cast SW:P once and then smite thereafter until either the count is up or combat ends. The next cast will start with SW:P again. I don't know squat about macros beyond what I've copied from this site, but I should be easy to find in the macro section. I would suggest browsing over searching as you will come up with a dozen other ideas.