That's a good idea. I have a G1 phone that's why I was thinking USB. Only downside with that is, you'd have to have a wireless network to make that work. I wanted this application for use at work, so that I could receive and send SMS w/my computer through my phone, and we don't have a wireless network here.
I think maybe I'll try starting with the WIFI approach though, and add USB later if I can figure it out.