I am also working on GPS-based application and I can have the device stop sending SMS back to the user every time the user send an SMS command. I think as long as the SMS is sent, it should be fine.
If the user wants to see the status of the device, then I might have to establish communication between my server and the device via TCP/UDP and have the iPhone app "parse" the information and display the status. Perhaps the best way is to have the server respond to the iPhone app saying "The device received your SMS command" and display it on the app so that the user knows his/her SMS were sent.
But yes, if we could get the location via SMS, then I could send those coordinates to the Google Maps app in the iPhone itself and it would display it for you.