It's not actually used for the 'FEAR' 'strategy'. Level 1 Smeargle is used on Trick Room teams. It usually starts with Fake Out or Follow Me, both of which have positive priority (and so ignore a level 1's low Speed), while its partner sets up Trick Room. A Focus Sash helps it survive an attack from the opponent which didn't get Faked Out, or a single Follow Me'd attack.
A level 1 Smeargle's Speed can go as low as 4 (I think). With that Speed stat, it's unbeatable once Trick Room is up, allowing it to put both opponents to sleep with Dark Void, or bring one of them down to 11 (or 1) HP using Endeavor.
Basically, instead of scoring a surprise KO, its purpose is to help its partner set up, and cripple opponents with Dark Void and Endeavor.
EDIT: Oh, and if you want to actually stand a chance of getting to Worlds, you must IV breed and EV train. My whole team had perfect IVs and EVs (no, I didn't cheat), yet I still got beaten in the second round.