Okay, I made a thread about this way back when the Arrive first came. I got my arrive day of release and it has been there.
Here's my adventure with it:
Contacted HTC, Microsoft, and Sprint. Unfortunately from all of them, I got the low level support stating it was a problem with Sprint. Sprint forwarded me to HTC. They also claimed that the autosplit was an "error on the manual" because the manual says it can do it, but it cannot.
Back in NoDo, it would just stop typing at 160. But with the first Mango beta, it now let you type past it, but didn't let you send, that's still current today.
I made a thread about it on Microsoft Answers with people still answering about it and basically reiterating the same things over and over again. But the current "answer" is from a guy who says he works for sprint and they are currently working on getting the issue fixed.
So... why is it a sprint problem? Here's the thing, Verizon also uses CDMA and can split the messages just fine (ask anyone with a trophy). While the Sprint Palm Pre (still have mine) split the text messages, you can see that it delays it and marks (1/X) for each of them, depending on how many you send. If you notice, however, this does NOT happen on the Verizon Palm Pre.
The way the networks handle SMS is different, even though they are both CDMA. CDMA does have a problem with more than 160 characters due to the nature of the network and how it handles the request. This problem is also current on the US Cellular Arrive, which is also a CDMA network.
Now my educated theory is that Sprint's and US Cellular's Network uses the CDMA 1xRTT to manage their SMS service and this doesn't handle characters past 160 very well. This is why the Sprint Palm Pre resorts to sending 2 messages in a delayed fashion.
Now why is this not current in Verizon? well Verizon's CDMA does NOT use 1xRTT. It just uses 1x which doesn't support data transfers. My theory is that they use their EV-DO networks to manage txting, and thusly, can manage more than 160 characters.
This is all just theory with what I've found over the time with the Arrive.
Now here's where I think things get funky. I believe Microsoft is not willing to implement a delayed txt message system and/or can't implement it into the current way it send txts. Thus why that employee said "Sprint's working with Microsoft to get it fixed"
So who's to blame? Neither Sprint, nor Microsoft, nor HTC. The person to blame is the situation. Microsoft's SMS system was designed with GSM in mind and Sprint's network was designed for compatibility in mind. The result is a new technology that doesn't work with something that is standardized for a network. (Before you go on about how Sprint should just implement their SMS system into their EV-DO network, their Nextel Phones, which are used by a fair majority of their customers, rely on the 1xRTT for data support. They can't just simply change it.)
So the best thing we can hope for is that Microsoft develops a delayed system to send the txt messages. Which I believe would be the easiest route, as it seems like something that can logically be scripted ("If more than 160 characters, cut by the difference, delay the 2nd message, and send")
Here are some links for your reading fancy:
160 Character limit for txt messages on HTC Arrive? - Microsoft Answers
Sprint Nextel - Wikipedia, the free encyclopedia
http://forums.windowscentral.com/htc-arrive-htc-7-pro/177651.htm