I've decided to try out Handcent SMS as a replacement for the default SMS app but im now getting two notifications when i get an sms. How do i go about disabling or erasing the default app? Thanks.

Open the default messaging app, menu button>settings , untick Notifications

Thanks.. This next question might be confusing but here goes.. since I have 2 sms apps, even if the default one does not give me notifications, does the phone use both apps to store the messages? i.e. if i continue to use Handcent and ignore the default one with notifications off, will i find an enormous pile of unread messages there in the future or do the two apps "overlap" somewhat in Android?

I believe they both sharing the same messages database, therefore you will only have one copy of the messages.