inre: "If I'm developing my app to make use of MDS and testing via the simulator, does this mean I'll have to purchase a BES before I deploy?"
no not really. you can deploy applications without having a BES, users would be using their own BES/MDS environment, not yours. If however you have a blackberry and would want to test it in a BES environment that you currently don't have, I suppose yeah you'd have to get a BES and run through there.
inre: " I've tried adding deviceside=true and EndToEndRequired to my connector string, and the app just hangs."
fwiw, deviceside=true + end2endreq specifies a BIS connection, not direct tcp. I haven't been able to make the MDS work w/ bis, but there may be a way. I'd suggest adding some error logging to prevent the 'just hangs' issue and work from there