iReal Sms App is back and with a bang. Though it was released two months back, the App was very buggy then. But the latest updated version seems to be pretty good. The App allows you to view your incoming and sent messages separately and also gives you the option to view it in conversation as per your requirement.
It also allows you to create draft and sent folder which isn’t available in any replacement app like Mysms or Bitesms. The app allows single sms deletion and also allows you to view the app in landscape mode. However this is only the demo version of the app. Whenever you open the aap there is a pop which says that it is the demo version and gives an option to purchase the App, which is quite irritating. Also we cannot rate it above My Sms app as iReal does not allow you to view messages stored in the inbox in the Demo version 
For me it ends up being just another sms utility for the iPhone, which Apple forgot.
Features of Current Version 2.0 costing (10 € / ~13 $)
* FULL app in Landscape Mode
* Conversation Mode
* Your SMS messages organized in folders: Inbox, Drafts, Templates, Outbox, Sent
* Saving messages as drafts or templates
* Search messages by sender’s name and text
* Character counter
* Reply, forward and delete messages
* Delete all messages or delete per folder
* Big text field – both for reading and writing SMS
* Add sender to contacts
* Turn on/off keyboard autoCorrection and autoCapitalization
* Automatically request sent notification via notification code
* Statusbar notifier for unread SMS
* Continue working while SMS are sent
* Mark all messages as read with one click
* SMS alerts can be deactivated -> no “new SMS” alerts when locked or outside iRealSMS
* Adding contact details to SMS
* Custom backgrounds via Winterboard are possible
UPDATE: App works perfectly on 3.0 firmware
Cydia is an Installer alternative, that Installs on Jailbroken iPhone 2.x… Info here
iPhone / iPod touch downloads