Skype (iTunes link) has been updated to 1.1, which brings it some new features making it more closely resemble its desktop sibling. So, what's new? Well, there's now support for Skype voicemail (subscription needed) and SMS text messaging.
However, SMS texting is not bidirectional. Which means that you can send SMS texts, but not receive them. And while a dialog box states that sent SMS texts will show up as sent from the sender's Skype screen name, in my case it displayed the "999-99" caller ID that typically accompanies calls from a Skype-based client. Perhaps that's because I don't have a SkypeIn number?
The 1.1 update also provides additional language support as well as more help when dialing phones.