No, it's not open to government monitoring, unless of course they have the ability to break "unbreakable" encryption. And, if they do manage to magically brute force a single key, they only get a single message decrypted. Each message uses a different key, so compromising a single message doesn't compromise the whole conversation.
For a school project I (sorta) implemented this on Android 1.5 two years ago. I stopped before finishing the key rotation stuff, so ended up with just a encrypted text messaging client. Another company just recently announced an OTR text message program for android, you should look it up! Textsecure by Whisper Systems.
