Carter Smith has a pretty good ceiling, and has an arm that can make almost all of the throws. He's certainly a lot more talented than any of the other Michigan quarterbacks (even Jayden Davis).
The way I see it, Michigan is chasing after their own version of CJ Leak. They've chased away other solid QB prospects in search of that golden fleece, and will end up paying the price one way or the other.
Unless Brian Kelly does something truly stupid, I highly doubt that Underwood flips. The warm climate of Baton Rouge, combined with Southern Hospitality is going to be difficult to beat, especially considering how miserable the weather is in Ann Arbor, and he looks to have a chance to play early and start as a sophomore.