These are potentially very broad and deep questions that can have many answers.

2) should i look at smartobjects? how are smartobjects exposed to 3rd party apps

I want to answer this question first as it goes to the answer of the first question. SmartObjects in K2 smartobjects simplistically act as data connectors to other systems. Out of the box there are dozens of types and more available in the market place but let’s assume your 3rd party app is running on SQL. You would create a service instance connecting to the database server. It would then enumerate the tables, views, stored procedures etc, as well as the methods supported such as: list, create, read, update, delete, etc. From this point you would create smartobjects

The user guide covers a lot about how smart objects work.

http://help.k2.com/onlinehelp/k2blackpearl/userguide/current/webframe.html

1) can i listen for/consume k2 events from this 3rd party app and publish extnernal events to K2?

This as you have probably surmised could be difficult.

You cannot really tie k2 to any other system without smartobjects. The question was can you listen or consume. This can be done in a couple of ways but one is to schedule a workflow to run periodically that would check a SQL value and if present or a certain value it would do further action and if not it would end.

A more complex solution that has all kinds of permission ramifications would be to allow the third party systems to start a workflow. You could have to allow remote PowerShell. I don’t really advise this approach. There are also some possibilities using web services. Without more information on the 3rd party system it would be hard to talk specifics.

K2 can also send data to another system it would depend on the system, what it supports and of course permissions.