If it's not listed here: http://knownhost.com/aup.html you should not have a problem. However, you have to watch out to make sure it does not eat up your VPS's resources.
However, to actually send SMS's to people you need to use an SMS gateway which costs money per SMS like http://www.clickatell.com/index.php and you would use their developer API's.
I ever hear about Kannel that could be used as SMS gateway, but i am not sure whether it need or not other SMS center instrument. (www[dot]kannel[dot]org/status.shtml[/url]. To send SMS / text message basically we need SMPP sever on our vps.
I am looking forward from you guys, if you succeeded installing your sms gateway, pls let's us know
Hope, KH will allow us to install SMS gateway on it.