Great!
I just tested SMS conection and it works! Nice! But it need some more polishing I guess

First of outgoing Call and SMS notification (I haven't tested apps notification yet) generated 2 SMS per action.
Also (and this is not only for SMS connection, but for call connection) - at the end off call, additional call notify is generated.
So now when someone is calling, this SMS exchange take place:
SMS 1) Phone->Watch: Incomming Call Notify
SMS 2) Phone->Watch: Incomming Call Notify (extra one not needed)
SMS 3) Watch->Phone: Reject Call Request (now I reject call on watch)
SMS 4) Watch->Phone: Reject Call Request (another one send)
SMS 5) Phone->Watch: Call End Received
SMS 6) Phone->Watch: Call End Received (another?)
SMS 7) Phone->Watch: Call End Received (and another)
SMS 8) Phone->Watch: Call End Received (and one more)
SMS 9) Phone->Watch: Out Going Call Notify (this one generates ANOTHER "fake" call notification on watch)
SMS 10) Phone->Watch: Out Going Call Notify (and another one)
Now I have extra two overlapped call notification on watch (even thou call have ended) so I "dissmiss" them with call reject
SMS 11) Watch->Phone: Reject Call Request (first "reject")
SMS 12) Watch->Phone: Reject Call Request (duplicated message)
SMS 13) Watch->Phone: Reject Call Request (second "reject")
SMS 14) Watch->Phone: Reject Call Request (duplicated message)
So now problems are:
1) duplicated mesages
2) extra fake outgoing call notify at the end of call (I think not connected with SMS link, but general)
PS. As for app icons not available on SMS link, application could cache icons when there is push or BT connection available, and reuse them during SMS connection
Cheers!