What is the SMPTE Time Code option and does anyone use it?

I read up on it and I know you need a tape drive. I just thought those were obsolete. What do you guys think?

You need the SMPTE card installed to use this function. It is a sync standard used by the film industry, adopted by professional studios.

MIDI time code, or MTC is the same, only sent over a MIDI cable instead. It is not the same as MIDI clock.

My xl came with that option.

XL's have the outputs as standard, but don't have the chip itself. You need to source this seperately.
SMPTE's real benefit is synchronising recording to multitrack tape, but in the age of digital recording and computers it's superfluous.
That said I'm tracking down a chip for myself to run with a Tascam Porta1 for oldschool bedroom DIY type stuff

and I know you need a tape drive

You don't need a tape drive to take advantage of SMPTE.