As I understand it, the iPhone is capable of sending MMS, but AT&T is afraid that a few million iPhone users suddenly having that ability will burn their infrastructure to the ground in a day[1]. So, they are presumably doing their best to strengthen their infrastructure before making the feature available.

I believe several non-U.S. carriers with iPhone users have it enabled already (on the iPhone), but I do not have first hand knowledge that this is true.

[1] I'm exaggerating for effect, of course.