Clean the ribs, and trim away any excess fat. In a medium bowl, stir together the sugar, 1/4 cup salt, ground black pepper, paprika, 1 teaspoon cayenne pepper, and garlic powder. Coat ribs liberally with spice mix. Place the ribs in two 10x15 inch roasting pans, piling two racks of ribs per pan. Cover, and refrigerate for at least 8 hours.
Preheat oven to 275 degrees F (135 degrees C). Bake uncovered for 3 to 4 hours, or until the ribs are tender and nearly fall apart.
Remove 5 tablespoons of drippings from the bottom of the roasting pans, and place in a skillet over medium heat. Cook onion in pan drippings until lightly browned and tender. Stir in ketchup, and heat for 3 to 4 more minutes, stirring constantly. Next, mix in water and brown sugar, and season to taste with cayenne pepper, salt, and pepper. Reduce heat to low, cover, and simmer for 1 hour, adding water as necessary to achieve desired thickness.
Preheat grill for medium-low heat.
When ready to grill, add soaked wood chips to the coals or to the smoker box of a gas grill. Lightly oil grill grate. Place ribs on the grill two racks at a time so they are not crowded. Cook for 20 minutes, turning occasionally. Baste ribs with sauce during the last 10 minutes of grilling, so the sauce does not burn.