Thanks to everyone for your comments about potty-training. I think the overall message was to relax. It's true that Smarty is only 3 and won't be starting first grade anytime soon. So aside from the money we pour into Huggie's banks, there's no reason to get it done immediately. Good advice! I definitely have a tendency to freak out about stuff and worry too much. Thanks for the perspective.
All right, roll up your sleeves people, here comes my next plea for help. Smarty has had some real sensory issues.
Any unordinary sensation used to be difficult for him. He used to cry any time someone around him coughed or sneezed, sometimes a yawn was too much. Vacuuming with him around was totally out of the question. He has really improved there, he still hates a blender or drill, but has learned to cope with it.
Touch used to be a real problem too. He didn't even like the feel of fleece. If we took off his shoes and put his feet in a cold, sandy, lapping river, it was enough to induce panic. Thankfully we had a great occupational therapist working with him for a while. He has overcome a lot of that too.
Here's the lingering problem. He still struggles with most foods. He eats anything dry, hard, and crunchy. He likes chips, pretzels, nuts, ect. He also likes things that are really viscous like yogurt, pudding, applesauce. He will eat fruits that are dry to touch on the outside like apples, raisins, and bananas, but that's about the limit. He is tolerant of granola bars and nutrigrain-type bars. Aside from an occasional sweet roll or piece of cake he won't eat any bread-like textures; meat and pasta are totally out of the question.
Presentation makes a huge difference. The less home-made it is, the more strait-from-the-package it is, the more interested he is. Involving him in the cooking process doesn't help much. Sometimes he wants to help, sometimes he doesn't, but it doesn't seem to affect his interest in food. We have the most success when food appeals to him visually. If it doesn't pass his eyeball exam, there's no way he's willing to touch or smell it, let alone taste it. No reward or punishment will motivate him. He was in a food class for a while and made some progress there. Peer pressure seemed to help a little, but that class isn't available to him anymore.

Here is Smarty at his first birthday party. It took quite a bit of coaxing to get him interested in that cake.
Everyone says to me, "Just let him get hungry, children won't starve." That is a myth. Smarty once held out for two full days over some chocolate chip pancakes. I promise this is not a matter of defiance. The message he sends back during these encounters is genuine fear of what's in front of him, and a plea for what he believes is 'real' food. He is perfectly submissive, not defiant. He's just terrified to put offending foods in his mouth. Thank heaven he likes Pediasure, or I literally think he would die of malnutrition.
Like with potty-training, I hope that some time and maturity will help. Perhaps the influence of his younger brother might be beneficial, but in the mean time, any bright ideas?