I don't know if this will help because it seems there are some tech issues at work. However, it might be worth a try...
Download SMS Popup from market. I've used this on the Droid X And now the Bionic. Not a fancy app, but very customizable. Main purpose to put incoming text message over lock screen in popup box where you can reply, ignore or delete right there. Can individualize notifications, too, and LED colors. This app might take over your SMS and it might be better ... Or not. But maybe worth a try..