This post is in response to the comment posted by one of the visitor on Internet settings for iPhone post asking how can he send the mms, because when he clicks on the image, it just gives option of email, assign to contact or use as wallpaper and no option to send it as mms.
For all those who are confused on how to use the mms feature to send the picture to their contacts using iPhone 3G or others, this article describes it all.
To send mms from your iPhone, first make sure that you have mms activated on your sim (contact the service center 
Once you have input the correct mms settings on your iPhone you need to make sure gprs / edge – internet is working on your sim to let mms work.
Finally, you need to make sure sending mms option is enabled in your iPhone settings (goto: Settings > Messages > MMS Messaging and turn it ON )
Now once the settings are all done, goto your messaging app (sms) and select the person you want to send mms to. then, on the left side of the input box for message, you will see a small camera icon, click on it, it will take you to the gallery where you can select the image that you want to send to your friend (see the following image).
Please note, after the above setting is done, now if you goto gallery directly too and click on the image options, you will get 4 options, including the mms one too this time along with emailing the photo, assigning to contact and using it as a wallpaper.
This way you can send mms to your friends / contacts and receive it too.