I use Twitterrific on the iPhone and SMS. I like SMS's because they're pushed to the phone, so I know straight away when somebody tweets. I read/tweet from Twitterrific. If (when?) Twitterrific can do push notification i'll be fine with losing SMS, but until then i'll just have to check for new tweets myself. I'm from Australia, one of the countries that just lost SMS's.
My experience with AIR (mostly twitter clients) has been that the app in use sticks out like a sore thumb and never feels quite right, be it on Windows or Mac OS X.
I hope later versions/apps look and feel more like desktop apps.