Ok, I have a jailbroken (duh!) iPhone 3G and I did got this program to work. Here's what I did.
First, I went to
http://mymedianet.wireless.att.com/ and after I entered my number, it told me that I couldn't use media net yadda yadda. Ok, so I took my SIM out of my iPhone and put it in my Tilt phone (any phone that supports MediaNet and MMS should work) and sent/recive a MMS to a friend just to confirm that I could from the Tilt. Success. I went back to
http://mymedianet.wireless.att.com/ and then it let me get in. Another success. Put the SIM back in the iPhone and used the setting of the OP. Success again! I could send and receive MMS using the iPhone.
The program works, is just that MediaNet is not enabled in the iPhone plans by default. Using a phone that supports it should activate the feature.