Clearing the cache in general is a way to resolve your issue.
Just curious,
1. Did you just try to delete Handcent and then re-install? I have had customers that would use Handcent as their main text/sms tool but still had their main box accept texts/sms with the standard application that comes installed, therefor duplicating messages.
2. Have you updated to Gingerbread 2.3?
3. Is handcent backed up to your microcard?
I recall the Droid X having similar issues where it would all of the sudden not cooperate and text properly. Predictive texting was turned off as a temp fix until a patch to fix came out....
if all else fails - back up all your important stuff and factory restore the Droid 2 -
Good luck!