Any Nokia will serve you well... their SMS functionality is always a familiar function.
But recently I got my hands on a iMate SP5 Smartphone, loaded with Windows Mobile 5. Although the general user interface isn't the fastest around, the SMS text engine is pretty smart. Smartest I've seen in a while. It could use a few interface tweaks (such as alternate word selection button placement and space button placement) but other than that, it actually works very well.
Switching from the Nokia, I found it quite annoying at first. But it's just a matter of getting used to it. It can predict whole words, and it uses your previous typing history to even try and predict sentences. Too cool!
http://thespoke.net/hubs/atlas/
http://spaces.msn.com/jonamafun/