MMS support was one of the most anticipated features of iPhone 3.0, but it turns out it has a nasty side-effect: group SMS sending has effectively been dumped.
Nick over at Gizmodo drew my attention to a lengthy discussion at Whirlpool of the problem: any time you try and send a group SMS, it gets converted to a group MMS instead. It might not make much difference to you depending on your plan and usage, but if you get a bunch of free SMS as part of a cap plan, then sending MMS as an alternative doesn’t look appealing. The main fixing options (until the carriers come up with a promised fix) is switching off MMS altogether, but there’s also a workaround for Optus customers detailed at Whirlpool.
Checked for update in iTunes today and there was a carrier update that appears to fix this.
Tested and it no longer says Group MMS when typing in multiple recipients.