HI I just called 02 and they confirmed mms was active on the acount, i will check the sim card in another phone, but assuming that it is, and I have replicated the settings as :
iphone 3g running 2.1 jailbroken
MMSC:http//mmsc.mms.o2.co.uk:8002
Proxy:193.113.200.195:8080
APN:wap.o2.co.uk
username:o2wap
password:password
image size:medium
user agent:iphone
Still no joy !!!