Naturally, I took the MMS feature for a test drive.
Now, when composing text messages, there is a little camera icon next to the text field. Press it, and a menu asks you to choose between an existing photo or a new one. Similarly, when viewing photos in the camera roll, the Share button adds MMS to the options list. Select an option and just follow the directions. After your message is composed simply hit Send as before, and away the message goes.
What's really neat is that a thumbnail of the photo is added to the threaded SMS/MMS conversation, so you can always see what you've sent that particular contact and what they've sent you in return.
Images that are received by the iPhone may be downloaded to the receiver's camera roll, which is really nice, as some time you'd like to be able to save pictures that your friends send you.
The iPhone can also send and receive voice memos and video clips. The process is the same as attaching pictures. I haven't been able to figure out what sort of length limit there is on the voice and video clips, but it is generally 20 or 30 seconds.
So there you have it. The iPhone can now send and receive multi-media messages.