I have been using SRS to learn Mandarin Chinese for the last 2 years now and I can also verify it is extremely effective when used correctly, and when understanding its' advantages and limitations.
I think sentences are also a much better way to learn than learning single vocabulary words, because they show the usage of the word in context. This is very important for speaking naturally and idiomatically.
Once you get beyond a beginner level, choosing a direction of study can be a little difficult. My technique is to find sentences or phrases from conversations I have with people, books/articles I read, and from movies/television shows - and then input it into the SRS. Preferably, each sentence has 1 new novel phrase or vocabulary word. Although this can be time consuming it gives a huge benefit. Let me give an example:
Question side: “問題是。。。你不覺得這樣,很。。。虛偽嗎?"
Answer side: 虛偽 (xūwěi - hypocritical, artificial)
So, in this case the second last two characters made up the word that I was unfamiliar with, so I put that on the answer side. The huge benefit is that I found this sentence in a book I am reading - so every time it comes up in the SRS, I not only recall the sentence, I recall the
context of the story (in this case a dialogue between two characters), and this has a double reinforcing effect. In the same way, that if a TV or movie character says a sentence over and over again in a video, it will cause you to remember the scene of the sentence, and at which part of the story the movie was in at the time.
The contrast of this method would be to find "pre-made" decks of cards for sentences in the language you are learning, but I find that it is harder to remember the items when the sentences are not as meaningful to you.
A key point for using SRS effectively is to use to review material already learned, not to learn new never before seen material. The article itself even mentions this.
(Also, Mnemosyne is my SRS of choice http://mnemosyne-proj.org/, but Anki is a good choice too.)