If you're using Handcent,
you need to disable notifications in your STOCK Messages program.
Open Messages, hit Menu > Settings > and uncheck the box for 'Notifications'.
Let Handcent's notifications do what they do, and SMS popup (the other program) might stop popping up.
I'd try the Handcent popup and see how you like that.
The Handcent one is great for several reasons, IMO. I can get a message, right over the lock screen (maybe you can with SMSpopup I have no idea), and the keyboard is already pulled up, ready to reply. I literally just type my message, push send, and push the End Call/Sleep/Whatever button on my phone. Done.
Or I just push the X in the top right corner, and it will mark my message as 'Read' so that I don't get another notification for it. Works perfect. Every time.
Yes, slightly laggy. But especially if I'm working, and I will not get to my phone for 5 seconds, the popup works perfectly. It will also pop up over whatever I'm doing and ask me to reply. I'm in love with it.