Actually, if "apps are working with SkippingStones" depends on a number of different factors.

First of all, the watch ending up in recovery mode is not related to whether a watch app actually works in the sense that its functionality is supported.
Reasons for the watch ending up in recovery mode could be, e.g., a problem during the upload to the watch or a problem with the watch app itself.
Unfortunately, I couldn't reliably reproduce the issue yet in order to track the problem down.
Thus, I don't know if its caused by SkippingStones or other problems.
If anyone is able to reliably reproduce the problem, please report the exact steps here.

With respect to the actual functionality: for apps requiring that components on the phone and the watch work together, obviously, the functionality on the phone has to be implemented as well.
The SmartStatus or Pebble MediaPlayer app support implementations in SkippingStones are such examples.
The actual communication can be done via different "APIs"/"protocols" and it depends on the watch app which method is actually used.

Last but not least, the XBMC app is an example for this, some apps even require triggering external actions, like controlling some media player device or querying web services etc.
This functionality also needs to be implemented on the phone and needs to interface with the external component.
So, generally speaking, the overall picture roughly looks like this:

Pebble <--> Phone <--> Other Devices/Services