Hi Jeff,
I had the same problem. It was not very clear from your pages or FAQs that international SMS was not supported. Now I see it's been made very clear in this page http://www.twilio.com/faq/international, that's great, the previous message was confusing to say the least. FWIW I complained about this on the getsatisfaction forums some two weeks ago http://getsatisfaction.com/twilio/topics/international_sms-1...
Fortunately I don't have a live app that depended on your service, so all it cost me was $50 deposited to start playing around.