DOD- well said, I was thinking the same thing. I have heard of many different attempts (usually by students) to build translation technology for ASL and for the reasons you listed, the projects are usually successful for grades and media attention, but ultimately unsuccessful in function. Jay- I appreciate your idea, but I think an app that works more like a dictionary of English to ASL (text/clip entries of words and common phrases) would make more sense. Whenever someone tries to show me a video about the ASL gloves, or the tablet that "watches your ASL and speaks for you", or whichever new thing comes out, I always say I prefer a pen and paper. But, since you are asking, I will answer the questions for you 
What are the main problems you face when signing, could an app that translates sign language to text be useful?
-Hearing people often become either frustrated or sympathetic (flip a coin!) when I sign. Obviously I wouldn't expect everyone to understand ASL, but when I try to use clear gestures with a hearing person, they can become nervous and confused just because they don't understand me. Rarely am I using and expecting ASL conversations with general public (which is why I would instead just write something down), but if I do happen to sign, that is the biggest problem.
How/Where would an app that translates sign language to text be helpful? (if you had this where would you use it - if at all)
-I guess this is a tricky question. Communication is needed most for me in airports, post office, maybe at a restaurant- but it would honestly be very off putting for both me and the hearing person if I was signing to my phone, having an app respond for me. I think it would add even more awkward layers to an already difficult situation. When I have a note to someone, it is the cleanest way to communicate without.
What is the current solution you use to translate sign language to text?
- I don't. Either I write (as in this moment typing), on a pad and paper, or the other person does. As far as needing text interpreted to ASL, that is never an issue for me (and I assume) most Deaf people, even when English isn't a first language. Reading this question makes me think "does he mean using an app to translate a sign or menu into ASL? That would be strange. Otherwise, interpreting someone's written response to me in ASL? Unnecessary- I think even first language signers would (and do everyday) be able to manage the written English.
If you could have anything to help what would it be?
-Genuine answer, without meaning to sound rude- the biggest help I can imagine is public awareness of Deafness, linguistic diversity, and if I can reach for the moon, rudimentary ABC fingerspelling from hearing people. The more practical answer, again, a notepad and a pen.
When teaching kids sign language would an app that translates sign language to text be helpful?
- I don't think so. I know they have DVD and computer-based ASL lessons (for example,Deaf Aotearoa, the New Zealand Deaf organization, has a great one called Sign Ninja, which is a kind of video game that helps people learn NZSL found here http://deaf.org.nz). Having video based interactive ASL learning is great, but only as a supplement to actually learning with a person one on one.
I don't think that was very helpful, but there it is. DOD made a great ending point, the good intentions people have for signing software are often a little bit disconnected from Deaf reality. I think if you are interested in helping Deaf people, you might be starting out wrong. Instead, take the opportunity to mingle here or in your community with Deaf people, make friends and go out in public with them to see what they experience, and then discuss it with them. Deaf culture should be your first step, just be sure that your project passes the "Deaf endorsement" test- engage with Deaf people and learn from them, rather than try to fix, teach or help them 
Best of luck!
