The viral strategy needs to be a natural extension to the app that requires SMS - not sure you want to just use it for the sake of it being viral (seems forced). A perfect example of this is the Twist app. The app tells someone you are meeting with when you will arrive. When you set up a twist ...
In my experience, yes. Dropbox did this with great success.
The best approach for building referrals into your sign-up process is going to depend heavily on what it is your users are signing up for. Is it something performance-based, like a fitness or language learning app, where the user can challenge a friend to compete with them for a higher score? Is...