What's the "correct" smooth structure on the category of manifolds? As will become clear, this is in some sense a follow up on my earlier question Why should I prefer bundles to (surjective) submersions?.  As with that one, I hope that it's not too open-ended or discussion-y.  If y'all feel it is too discussion-y, I will happily close it.
Let $\rm Man$ be the category of smooth (finite-dimensional) manifolds.  I can think of (at least) two natural "smooth structures" on $\rm Man$, which I will outline.  My question is whether one of these is the "right" one, or if there is a better one.
I should mention first of all that there many subtly different definitions of "smooth structure" — see e.g. n-Lab: smooth space and n-Lab: generalized smooth space and the many references therein — and I don't know enough to know which to prefer.  Moreover, I haven't checked that my proposals match any of those definitions.
In any case, the definition of "smooth structure" that I'm happiest with is one where I only have to tell you what all the smooth curves are (and these should satisfy some compatibility condition).  So that's what I'll do, but I'm not sure if they do satisfy the compatibility conditions.  Without further ado, here are two proposals:


*

*A smooth curve in $\rm Man$ is a fiber bundle $P \to \mathbb R$.

*A smooth curve in $\rm Man$ is a submersion $Y \to \mathbb R$.


Then given a manifold $M$, we can make it into a category by declaring that it has only identity morphisms.  Then I believe that the smooth functors $M \to {\rm Man}$ under definition 1 are precisely the fiber bundles over $M$, whereas in definition 2 they are precisely the submersions over $M$.
(Each of these claims requires checking.  In the first case, it's clear that bundles pull back, so all bundles are smooth functors, and so it suffices to check that if a surjective submersion to the disk is trivializable over any curve, then it is trivializable.  In the second case, it's clear that if a smooth map restricts to a submersion over each curve, then it is a submersion, so any smooth functor in a submersion, and so one must check that submersions pull back along curves.)
I can see arguments in support of either of these.  On the one hand, bundles are cool, so it would be nice if they were simply "smooth functors".  On the other hand, we should not ask for smooth functions (i.e. 0-functors) to be necessarily "locally trivializable", as then they'd necessarily be constant. Maybe the correct answer is definition 2, and that bundles are "locally constant smooth functors", or something.
Anyway, thoughts?  Or am I missing some other good definition?
Addendum
In the comments, folks have asked for applications, which is very reasonable.  The answer is that I would really like to have a good grasp of words like "smooth functor", at least in the special case of "smooth functor to $\rm Man$".  Of course, Waldorf and Shreiber have explained these words in certain cases in terms of local gluing data (charts), but I expect that a more universal definition would come directly from a good notion of "smooth structure" on a category directly.
Here's an example.  Once we have a smooth structure on $\rm Man$, we can presumably talk about smooth structures on subcategories, like the category of $G$-torsors for $G$ your favorite group.  Indeed, for the two definitions above, I think the natural smooth structure on $G\text{-tor}$ coincide: either we want fiber bundles where all the fibers are $G$-torsors, or submersions where all the fibers are $G$-torsors, and in either case we should expect that the $G$ action is smooth.  So then we could say something like: "A principle $G$-bundle on $M$ is (i.e. there is a natural equivalence of categories) a smooth functor $M \to G\text{-tor}$", where $M \rightrightarrows M$ is the (smooth) category whose objects are $M$ and with only trivial morphisms.  (Any category object internal to $\rm Man$ automatically has a smooth structure.)  And if I understood the path groupoid mod thin homotopy $\mathcal P^1(M) \rightrightarrows M$ as a smooth category, then I would hope that the smooth functors $\mathcal P^1(M) \to G\text{-tor}$ would be the same as principle $G$-bundles on $M$ with connection.  Functors from the groupoid of paths mod "thick" homotopy should of course be bundles with flat connections.  Again, Schreiber and Waldorf have already defined these things categorically, but their definition is reasonably long, because they don't have smooth structures on $\rm Man$ that are strong enough to let them take advantage of general smooth-space yoga.
Here's another example.  When I draw a bordism between manifolds, what am I actually drawing?  I would like to say that I'm drawing something close to a "smooth map $[0,1] \to \rm Man$".  I'm not quite, by my definitions — if you look at the pair of pants, for instance, at the "crotch" it is not a submersion to the interval.  So I guess there's at least one more possible definition of "smooth curve in $\rm Man$":


*

*A smooth curve in $\rm Man$ is a smooth map $X \to \mathbb R$.


But this, I think, won't be as friendly a definition as those above: I bet that it does not satisfy the compatibility axioms that your favorite notion of "smooth space" demands.
 A: I think that the most interesting part of your question is the part you put in parentheses!

(and these should satisfy some compatibility condition)

What are your compatibility conditions?  That is everything here.  If you specify the correct conditions, you may find that all your definitions collapse to just one.
I have an issue with Konrad's answer (which I doubt very much that he will be surprised to hear me express!).  Whenever I heard words like "Grothendieck topology" or "sheaves" or encoding similar ideas then I feel that something's been lost.  I don't like the idea that "smooth" is just "really nice continuity".  "Smooth" sits alongside continuity and can be expressed in a different way which is extremely simple: takes smooth curves to smooth curves.
Of course, I would say that, as everyone by now presumably knows that I prefer Frolicher spaces to the other variants (like Chen spaces or diffeological spaces, see generalized spaces for links).  It is interesting that Chen's third definition (by my count) was stronger than his eventual sheaf condition and was more along the lines of "a map is smooth if enough tests say that it is smooth".
But Frolicher spaces have a problem, which is that it is extremely difficult to prise them away from being a set-based theory.  The compatibility condition is so strong that it forces an underlying set.  I'd really like to figure out how to make this extension, and I know that Urs would as well.  If I could just encourage you and Konrad over to the nLab to play around with these ideas to see how they could work ...
If you want to study The Smooth, The Whole Smooth, and Nothing But The Smooth, then you should do so and not flirt continually with continuity.  The stronger compatibility condition means that more stuff is smooth than you first thought (witness my recent question on this) and that makes it interesting!  The unexpected happens, so study it!
This isn't much of an answer so far, it's more of a commentary on your question which (as is usual for me) is too long for an actual comment.  So let me end with an actual answer (which I freely confess that I stole from a rabbi):

That is such a great question, why on earth would you want an answer?

A: This is an extremely interesting question. I think what you need is the notion of a stack over smooth manifolds (i.e. a sheaf of groupoids). Such a stack could assign to each smooth manifold $U$ 


*

*the category of smooth fibre bundles over $U$.

*the category of surjective submersions over $U$.


The problem is the gluing axiom for this stack. To state it, you have to decide for a Grothendieck topology on the category of smooth manifolds. Here you have again the two choices 1 and 2, and some more. 
According to the calculations I just did (and I should add that it's late and I am tired), all four possible combinations work. So it's again up to you! 
Personally, I have a preference for the submersions. If you require fibre bundles, it seems that the manifolds in a "connected component" of the stack are all diffeomorphic, whereas it should be possible to smoothly change the diffeomorphism type. 
A: Perhaps Erhesmann's Fibration Theorem helps to clarify the relation between these two possible definitions of smooth curves.  The theorem states that a proper surjective submersion is in fact a locally trivial fibre bundle (with compact fibres).  
This means that the two notions of smoothness will coincide on the subcategory Manproper ⊂ Man  consisting of manifolds and proper maps.  On the other hand, if I've understood correctly what a smooth functor M to Man is, then a bundle over M with compact fibres should be the same as a smooth functor to the subcategory Manproper.
