According to Michael Lombardi of SI.com, both Alex Smith and Shaun Hill will have an opportunity to start in preseason.

From SI.com:
Mike Nolan, the 49ers head coach, told the Sacramento Bee that both his quarterback candidates, Alex Smith and Shaun Hill, would have an opportunity to start an exhibition game and that he hoped one of them would be leading the competition by the third exhibition game Aug. 21 in Chicago. That player would then start the Chicago game and be the 49ers' opening week starter.

"Once a guy is the guy, he better stay ready and stay atop his game," Nolan said. "It's not like this is a locked-in job forever."

Look for the 49ers to play musical chairs at quarterback this year. One bad game will lead to a change. When the battle seems this close, making a change is not a hard issue.