Yeah, you're thinking of the XM29 "Objective Individual Combat Weapon," which was an assault rifle with the 20mm programmable grenade launcher on top. H&K essentially removed the smart grenade system to create the XM8. They also made the XM25, which was just the smart grenade launcher bit. All of those weapons never got past prototype, though all of this research eventually produced the M320, which is a non-smart under-barrel 40mm grenade launcher.

There's also South Korea's K11, which is the same concept as the XM29, and seems to actually be used, though I can't find much info about its effectiveness.

The conclusions from the failure of the XM29 I believe was that it isn't trivial to operate a smart grenade launcher, and the 20mm grenade doesn't have as much lethality as you would like. But perhaps the K11 was able to rectify these issues. I personally think this need for precise, powerful fires could be filled by a crew-serviced weapon mounted on an APC/IFV. Doesn't even have to be a smart grenade, could be a special autocannon or something.

The Mk-19 has been in service since Vietnam.

Of course, but it doesn't have programmable grenades. Though apparently in the last few years some air-burst grenades have been developed for it. The idea of these programmable grenade systems is being able to lay down very accurate fire, where you can program the grenade to punch through a wall and detonate 1m after it comes out the other side.

There's also the Mk-47 grenade launcher which has smart munitions.

https://en.m.wikipedia.org/wiki/Mk_47_Striker

I didn't know they had smart munitions, interesting. I guess what I'm picturing is a Mk-47 with smart munitions mounted on a remote weapons station on an APC/IFV. Putting it on an armored vehicle makes it more maneuverable of course, but it also provides protection to the gunner. Unlike warfare in a more open setting, due to the presence of buildings you may have to get well within the range of small arms fire to have line of sight to your target.

And apparently there's some work being done on equipping Stryker's with the XM813, a 30mm Bushmaster autocannon that can fire programmable air bursting rounds. Which might accomplish the same thing.

In the article, the Strykers proved to be too vulnerable in the urban environment. They brought in Bradleys and M1 Abrams tanks instead.

Very true. Well, the Bushmaster prototype could probably be put on the Bradley in place of the Bushmaster that's already there. As for smart grenades, I don't think there's an obvious place to put one on a Bradley, but some versions of the Abrams TUSK included a CROWS remote weapons system with an HMG, maybe you could replace the HMG with the grenade launcher?

There's definitely a need for armored vehicles better suited to urban combat. Maybe the Army's Armored Multi-Purpose Vehicle program will provide something. I don't know much about how vehicle armor works, but maybe there's room for optimization? I mean, it's not like the enemy here is firing APFSDS rounds, or using advanced ATGMs. It's all IEDs and RPGs at close range. I know there's stuff like having a V-shaped hull improves performance against mines, and slat and cage armor to deal with explosively formed penetrator type weapons, but I wonder if there's other techniques that can produce a survivable vehicle without needing a full, 60+ ton tank

Yup. EFPs are no joke.

Right. I was answering the last part of the comment, perhaps should have made that more clear.