This article from New York Magazine bears further consideration. I'm willing to bet that further research shows that praising students for being smart is better than not praising them at all. But this researcher suggests that it's not as good as praising them for being hard-working. Interesting, and with potent ramifications.
Hat-tip to Alexander Russo. (Don't seem to be able to add a permalink, so here's entry information: "Research and Writing: Who does it well?" 3 Oct 2008, 12:53. Link: "How not to talk to your kids: The inverse power of praise." Category "Media Watch.")