Before we delve into the smells and bells themselves, perhaps it would first be helpful to step back and consider the theology behind a sacramental.
Why is it that Catholics light candles, bless themselves with holy water, make the Sign of the Cross, pray with rosary beads, and wear holy medals?
Is this mere superstitious recourse or simply habituated responses?
Well, no. These sacramentals have been around for a long time (as in, even going back to Moses!) and they have a rich, beautiful meaning.
In a sentence, we have sacramentals because these physical items and gestures signify something greater and, in having recourse to them with the right intention, God actually works through them to bestow His grace upon the soul.
Sacraments are outward signs, instituted by Christ, for the reception of supernatural grace (the greatest of graces!). Christ is the principle celebrant of each sacrament. Thankfully, the sacraments work ex opere operato (from the deed done). This means that they are efficacious regardless of the minister: they always produce sanctifying grace by virtue of the rite employed. There are seven sacraments and they are necessary for salvation.
Sacramentals are also outward signs, but here is where the differences begin. Sacramentals were instituted by the Church and they are for the reception of actual grace. They prepare the soul for the supernatural grace of the sacraments. The efficacy of the sacramental is entirely dependent on the disposition of the believer. Holy water might produce a miraculous cure in one person, but do absolutely nothing for another. It is absolutely subjective, based upon the one using them.
Whereas sacraments are required for salvation, sacramentals are entirely voluntary. No one has to wear a Miraculous Medal. However, lest we be tempted to disregard them, we must remember that sacramentals can fill our days with God's grace and properly orient our souls to best receive the supernatural grace of the sacraments.
We can consider them the means to live a richer, fuller Catholicism--and thus, a richer, fuller life in Christ.
Not Catholic? Join on in! Sacramentals are not restricted to only baptized Catholics. In fact, non-Catholics should definitely put the sacramentals to use, as they are conduits of actual grace.
The woman with the hemorrhage illustrates the power of the sacramentals. It was by touching the hem of Jesus' cloak that she was cured. Her faith made her reach out to touch His cloak. It was, of course, Our Lord who healed her (not the cloak!), but He allowed the cloak to be the means to bring about that cure.
Meanwhile, Jairus' daughter shows us the power of the sacraments. She was dead; she could do nothing. It was Jesus who took the initiative to perform an outstanding miracle: bringing her from death to life! This, indeed, is what occurs in the sacraments. Jesus transforms the soul and bestows upon it His own supernatural grace.
So, you see, sacraments are far more important.
But sacramentals have a role, too.