We study the elasticity, topological defects, and hydrodynamics of the recently discovered incommensurate smectic (AIC) phase, characterized by two collinear mass density waves of incommensurate spatial frequency. The low-energy long-wavelength excitations of the system can be described by a displacement field u(x) and a phason field w(x) associated, respectively, with collective and relative motion of the two constituent density waves. We formulate the elastic free energy in terms of these two variables and find that when w=0, its functional dependence on u is identical to that of a conventional smectic liquid crystal, while when u=0, its functional dependence on w is the same as that for the angle variable in a slightly anisotropic XY model. An arbitrariness in the definition of u and w allows a choice that eliminates all relevant couplings between them in the long-wavelength elastic energy. The topological defects of the system are dislocations with nonzero u and w components. We introduce a two-dimensional Burgers lattice for these dislocations, and compute the interaction between them. This has two parts: one arising from the u field that is short ranged and identical to the interaction between dislocations in an ordinary smectic liquid crystal, and one arising from the w field that is long ranged and identical to the logarithmic interaction between vortices in an XY model. The hydrodynamic modes of the AIC include first- and second-sound modes whose direction-dependent velocities are identical to those in ordinary smectics. The sound attenuations have a different direction dependence, however. The breakdown of hydrodynamics found in conventional smectic liquid crystals, with three of the five viscosities diverging as 1/ at small frequencies, occurs in these systems as well and is identical in all its details. In addition, there is a diffusive phason mode, not found in ordinary smectic liquid crystals, that leads to anomalously slow mechanical response analogous to that predicted in quasicrystals, but on a far more experimentally accessible time scale. © 1988 The American Physical Society.