1. Does eth items get damaged while dueling ? Can a eth items get broken in duels ?
2. Exile has any usefulness except in duels when it comes to smiters/chargers ? In other words , for smiters/chargers Zaka > exile in pvm ?
1. Yes ethereal items do get damaged in duels. Ethereal items can break in duels. The only exception would be an ethereal weapon that you do not hit people with.
2. In PvM HoZ is much better than Exile. In PvP often times HoZ is a better shield vs all, were as Exile really shines versus Barbs when the huge defense is necessary.
Usually for Smite vs Smite Exile seems to be the choice since it gives CtC life tap and could potentially hit for more on max damage hits depending on what shield you made it in. Also in Smite vs Smite the resist from HoZ is not really important. Although, all elite pally shields have the same average damage in the end. The added defense will help versus charge as well.
Everytime I used to duel with my smiter vs other smiters I used a HoZ and I would win most of the duels against equally geared smiters. HoZ gives a nice Vitality bonus and the huge block percentage allows you to attain higher life.
If it were my smiter, I would use a HoZ for S vs S even though the majority of battle.net seems to love their exiles.
In Smiter vs Hammer HoZ would probably be better since it lets you get more life. Against a hammerdin resists aren't going to matter and neither will defense. The only things that really affects a smiters survivability against a hammerdin are skill/experience and how much life you have.