I used to get SMS alerts in lock screen which showed a blue box with the option of "close" or "reply". Now I get a green slider box with a white bubble. How can I change this back? I have set the notification to "alert" .
It sounds like you're describing the style of text-message notifications pre- and post-iOS 5 (when Notification Center was introduced).
If I'm not mistaken, the first case looks something like this:
And the current case looks like this:
Unfortunately, there's no built-in way to revert this change: while the style of the iOS modal popup that appears to inform you of an alert while you're using the phone still looks the same (bluish background with acknowledgement buttons), the style of lock-screen notifications (whether the phone is locked or not) have changed to a black background with an app-specific icon that can be swiped to activate the alerting app.
Short of some sort of Jailbreak tweak, or somehow downgrading your iOS version, there's no way to undo this change.