How come I can't send picture messages on my iPhone?

How come I can't send picture messages on my iPhone? The camera icon button next to the text box area is always grey. The only time I can send pictures is when another person has iMessage. I know you can send pictures without iMessage but how come I'm not able to? Is it because I don't have a cellular data plan? My friends don't have one but they can send picture messages regularly. And I know it's not because of that because I can send picture messages on my G1 when I take my SIM card out of my iPhone and put it into the G1 instead. I've tried going into settings and turning on the MMS option like people do in the video tutorial but when I open my message in settings, i don't have an MMS option.

The service provider needs to sent settings to your iphone. Call them and they will do immediately or send the settings via text