When we started hiring about 6 months ago at our startup (groopic.com), here's what my thought process was:
We need great people that we want to work with - Incubators and Accelerators invest in people - They know how to judge them - World's best accelerator (YC) asks the founders a few questions and short lists companies on the basis of the answers - There must be something in those questions - Adapt them for you hiring to screen the pool of applicants. In our case, it has worked like magic. We are able to filter about 65% of the applicants. For the rest, we call them for first interview, only 10% left after that. They are the ones we spend a lot of time on, and we hired 5% of the applicants in the last 6 months.
Depending on the load requirement, I have used NowSMS (nowsms.com) for some of my projects. NowSMS is pretty straight forward to use. For others, I wrote my own gateway using Smslib - that can be a pain though, depending on the phone you want to you.