The next generation smart grids aim at revolutionizing the traditional grid by introducing new features, concepts and services. One of these new features is the ability to connect a small-scale generation unit directly on the distribution network. This kind of power generation has been referred to as Distributed Generation (DG). This paper looks at a variety of issues concerning the integration of DG units with the smart grid. This paper indicates the benefits provided by this integration and highlights important design issues that are highly relevant. It also examines the services that are essential for effective DG integration.