When you try to connect to SQL Server from PowerShell script and you get following message:

Unable to find type [Microsoft.SqlServer.Management.Smo.Server]

then you have to download and install following components:

  • Microsoft System CLR Types for SQL Server 2008 R2
  • Microsoft SQL Server 2008 R2 Shared Management Objects
  • Microsoft Windows PowerShell Extensions for SQL Server 2008 R2

From here.