Like you I got next to NO 3rd party apps working on the DevTeam jailbreak which defeated the object of jailbreaking in the first place!
Its a messy job they did compared to 1.1.1 and 1.1.2 JBs!
I used iJailbreak which is based on Nate's method and mChat works great along with all the other 3rd party apps I tried pretty much!
As for this method breaking the SDK functionality - lets remmeber that this jailbreak is NOT the final 1.1.3 JB - it is a temporary measure to keep us all happy until the SDK is officially out then they will release the "Official" official 1.1.3 (or 1.1.4 if we get a firmware update) jailbreak!