I assume you have Photo Stream already enabled on the iOS devices. On the device you want to share from open Photos/Photo Stream and tap the + button then enter the Apple ID for the other persons devices. Only the person who makes the stream can add photos to a shared stream. If you wish to share photos back and forth the other person will have to do the same.
To set up Photo Stream, http://www.apple.com/icloud/setup/
Photo Stream FAQ, http://support.apple.com/kb/HT4486
Photo Stream is enabled on both phones.
I've worked out the issue I was having - "create" was greyed out when I tried to share the Photo Stream but that was because I hadn't named the Photo Stream. Once I named it I was able to share.
However what I need to do is actuallly share the Camera Roll.
How do I do that, without having to individually select each photo within Camera Roll?
The main Photo Stream is for sharing new Camera Roll photos between your own devices not to mention a convenient way to transfer them into an iPhoto Library on a Mac. I believe the iCloud Control Panel can add similar functionality to a PC. It is however limited to one Apple ID.
Only the Shared Photo Stream can be shared with other multiple Apple IDs or even other people with a web address. It can not be setup like the main stream to automatically populate with the new photos in Camera Roll. Only the photos you add to it will be shared with the Apple IDs you choose.
As I mentioned above, I believe DropBox will do what you want, I just haven't tested it out yet.