I was a long time user of Handscent, until I got my GS4. Although I hate the stock messenger, it works... I had massive problems with Handscent failing to send on my GS4, and pictures never send. I have played with all the settings, defaults, etc. and emailed Handscent, and they never responded, so I gave up and went back to stock.
As for the text alert sound, I went into the stock texting app, then went to settings, and set the alert tone from there and have had no problems with alert sounds.
And yes, as far as I have found, your ringtones, alert tones, notifications, need to be in the proper folder on the internal storage. Use the ringtones or notifications folders. If you have deleted them, just recreate the folders, but make sure you spell them correctly and don't have any spaces or characters.