Bookmarked: Messages is the new SMS, and is renamed to signify the addition of MMS (multi-media messaging service). It allows, in the case of the new iPhone OS 3.0 software, for you to receive, vCards (contacts), audio, location, and — for iPhone 3GS only — video to be sent using the Messages interface to any other smartphone or feature-phone that supports MMS and those file types.
Source: AT&T iPhone MMS Arrives Today — Here’s a Walkthrough! | The iPhone Blog
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