Does SoftwareSerial and the servo library produce interrupt conflicts?
I have heard that this may cause interrupt conflicts.


Indeed. The Arduino can only run one interrupt routine at a time, and:


Servos use rapidly firing interrupts
SoftwareSerial both turns off interrupts while sending (for relatively long periods)
SoftwareSerial uses an interrupt for receiving that runs for an extended period


So really you can't use both together.

Options?


Use hardware PWM to drive the servos (There is a library for this somewhere)
Use an external servo PWM driving board (Adafruit do one IIRC)
Don't use SoftwareSerial.  IIRC AltSoftSerial is better, though no software serial implementation will ever be particularly good.


The underlying problem is that the low-end Arduinos only have on serial port. If you need to use more than one serial port then you really need to be looking at using a different Arduino - one with multiple serial ports.