Should parse nested quotes:

.
"foo 'bar' baz"
.
<p>“foo ‘bar’ baz”</p>
.

.
'foo 'bar' baz'
.
<p>‘foo ‘bar’ baz’</p>
.


Should not overlap quotes:

.
'foo "bar' baz"
.
<p>‘foo &quot;bar’ baz&quot;</p>
.


Should match quotes on the same level:

.
"foo *bar* baz"
.
<p>“foo <em>bar</em> baz”</p>
.


Should not match quotes on different levels:

.
*"foo* bar"

"foo *bar"*
.
<p><em>&quot;foo</em> bar&quot;</p>
<p>&quot;foo <em>bar&quot;</em></p>
.

.
*"foo* bar *baz"*
.
<p><em>&quot;foo</em> bar <em>baz&quot;</em></p>
.


Should try and find matching quote in this case:

.
"foo "bar 'baz"
.
<p>&quot;foo “bar 'baz”</p>
.


Should not touch 'inches' in quotes:

.
"Monitor 21""
.
<p>“Monitor 21&quot;”</p>
.


Should render an apostrophe as a rsquo:

.
This isn't and can't be the best approach to implement this...
.
<p>This isn’t and can’t be the best approach to implement this…</p>
.


Apostrophe could end the word, that's why original smartypants replaces all of them as rsquo:

.
users' stuff
.
<p>users’ stuff</p>
.