OK, thanks for the replies. I ended up using the Settings/Security/Reset method.
However, I did download and use MyBackup Pro (well, the demo version for now) to first do a backup of all system settings, bookmarks and home screens. Then I also did a separate backup of my contacts. I could have backed up my text messages & a few other things, but the text messages were what was causing the errors.
Then after the reset, I went to the Marketplace and re-installed most of my essential applications, including MyBackup of course.
And lastly, I went to MyBackup and restored my system settings and then contacts.
In the end, it ended up getting my phone 'pretty close' to where it was. There will definitely still be some resetting of individual application settings and other things, but the majority was there intact! And it appears that my contacts came in OK as well, including their photos. I wasn't extremely concerned about this as I sync my phone with my Outlook contacts/calendar, but it could be helpful for those who don't.
I recommend this method if you need to hard reset your device and want to save a bit of time in getting it all back up to where it was. Fortunately for me, I have only had it less than a week, so not too much to lose. Now HOPEFULLY I won't get that crazy SMS corruption again!!!