I use Q4-RC3, so I'm not sure if the smaller variations not included in the RC-4 updates makes a difference here on an RC-3 install. No re-install was recommended, but there can still be small variations.
For me it works, all commands below work on my Q4-RC3 fully updated system.
Try see if this works for you too in dom0: qvm-run sys-net 'gnome-terminal -e xterm'
You can also try this one if there is something wrong with xterm "qvm-run sys-net 'gnome-terminal -e smartctl, your command etc.'
As I recall, Marek was looking to purge some packages during RC-4 compiling, because it was just about a bit bigger than what could be fit on a DVD size. So some things had to be removed. Perhaps xterm was one of those. Try check if it's installed in your template. As far as I know it wasn't removed for security reasons, it was size reasons. So I don't think its a problem to just manually install it yourself. Assuming, it's gone, it's a guess on my part. I've seen others report Thunar missing in dom0 too in RC-4. As far as I understand the same goes here, Thunar might just be removed for size reduction, and not due to security. Although it's a security concern if users have an easier time to access dom0, Qubes 4 seems to be a bit early to remove such things just for this. Maybe it could be done in Qubes 5 or Qubes 6, but there are still too many things to be done in dom0, just yet. Either way, this might explain it if xterm isn't installed, but used to be installed in the past. Try check if its there or not.
Another alternative could be to put a script inside your AppVM that does the smartctl execution. Then Execute the script with
qvm-run sys-net 'bash /path/to/script'
If none of this is working, then perhaps something more serious is going on? No error messages or such sorts?