The first time I set up SMSQL with Protection Manager integration, I had the same problems.
You have to let SMSQL integrate with Protection Manager through the SMSQL configuration wizard, couple it to a Protection Manager dataset and choose a retention type (hourly, standard, ...). The only thing you need to do in Protection Manager is to make a policy based on 'local backup, then remote backup', attach it to the automatically created dataset for SMSQL and set the protection lags and destination (backup) retentions. You don't have to set primary retentions and more importantly, you don't set a schedule !!!
Everytime an SMSQL backup takes place, a manual job will be launched in Protection Manager to update the relationship. You don't schedule these ones from Protection Manager.
I have hourly and daily backup jobs and I use the standard backup set for the hourly ones and couple them to the hourly Protection Manager retention through the backup wizard. For the daily backup set I use the daily retention.
Re: Data Protection with SME/SMSQL, Protection Manager and SnapVault