I try to run SmarThink 1.20 under Winboard but it does not seem to use the SmarThink.ini file

You need to place the SmarThink.ini in the SmarThink data directory.

The data directory depends on the windows version and language.

Under vista or windows 7 you can find the data directory via: %programdata%\Lokasoft\SmarThink1.20 Which resolves to: c:\ProgramData\Lokasoft\SmarThink1.20

Under windows xp its usually under: C:\Documents and Settings\All Users\Application Data\SmarThink1.20