I started this experiment to be able to test the integration of a web based (PHP) application and SMS using a phone connected to machine on which web server is running.
Gammu seems to be a good open source option to setup PC to phone connection. Gammu comes with multiple utilities such as Wammu (which adds UI based interface to this). Since I was looking specifically for SMS based options, there is a utility called gammu-smsd which comes bundled with Gammu which runs as daemon and can be used to integrate incoming and outgoing SMS. It comes with multiple options for integration such as file based integration, SQL (MySQL, PostgreSQL, SOL Lite) based integrations.