While the stock messaging app on Android is ok, there is definite room for improvement. This is where Handcent comes in. It adds multiple themes and layouts, customizable notifications on a per contact notification, and various other options.
If you like the iPhone way of displaying messages, there is an option for that, complete with the chat bubbles. Or, if you prefer the default android look, you can do that too. Since everything can be toggled on and off, you can have almost any mix of a theme that you’d like.
There is an option for a popup notification of new messages that lets you reply to them without even having to open up the app. It also includes a widget that displays the number of unread messages, however I’ve not found much of a use for that as I use the notification bar for that.
Stability is not a problem, as I’ve yet to have any crashes or lost messages in the 3 months that I’ve been using it.
I would recommend Handcent to anyone who uses Android for messaging a lot, as it gives much more stability and control to your messaging.