mem9 did a great job with his ArabicSMS app, enabling us to receive Arabic text messages and at the same time giving us the ability to delete individual messages as well as forwarding (eliminating the need for SMSD). But thanks to iPhoneIslam you can now read Arabic messages from the iPhone's native SMS application. It's not perfect, but hey it's a start!
All you gotta do is follow the steps here.
In other news, there are rumors already popping up about the new 1.1.3 update, which will feature the ever requested disk mode storage and a dictaphone (a third party app called vNotes or Voice Notes already does this :-p).