For example, users interact with user interfaces, not messaging layers. If you can get people using your interface, you can switch the messaging layer where appropriate. Notice Google now sending IM to SMS?
At my startup, Borange, we send group SMS for free on the iPhone, and are working with metadata and a user interface to innovate around sharing social availability and impromptu invitations, one of SMS's big use cases. When the time is right (read PUSH for iPhone?), we'll migrate users to a modern mobile messaging layer, and keep our backwards compatibility with free SMS for interacting with the rest of the world.
Check us out, by the way. We just launched our iPhone app and are looking for investors and partners who believe in the Matrix and major change in the communications space. http://www.borange.com.
Jeez, I truly do wish you guys luck, but group/social SMS is a pretty tough nut to crack.
(I used to cover the mobile industry for a trade publication.)
Yeah, crazy dead heap there, though! How long until SMS joins it? :)