If there's one thing that really grates on me about iOS on the iPhone it's the notifications. They were much improved in iOS 5, but compared to Android, they're just backwards. Not if this awesome-looking concept became a reality, though. Come on Apple, make it happen.
Back in my jailbreaking days, there were a few tweaks that implemented something like this, but they weren't this slick looking. A notification pops up as normal, but there's a respond button that drops down a message box for iMessages so you can reply instantly.