We don't have an Apple Smart Cover on hand to see if the sleep/wake functionality is retained from iPad Air cases -- but we will in time for the full review.
I purchased a midnight blue Apple Smart cover last night and it has retained the sleep/wake functionality from the iPad Air cases.
I ordered mine from Best Buy (was able to trade in my iPad Mini 2 [16 GB WiFi ]for $150 BB gift card plus an additional $25 gift card for the early purchase)
Looks likes I can pick it up today (received email confirmation March 29th)