I recently just started using handcent, and the default is message bubbles. (I guess that's the best way to describe it.)
So I quickly took a peek under the hood of Handcent and played with some settings. COOL! Open up Handcent, make sure you're at the screen when you can see the list of your contacts/conversations. Press the Menu key > Settings > Conversation style > 4 choices (Handcent classic, Handcent, IPhone, and Android). Experiment and see what you like best.