Right now, there is no way to send pictures as "text messages." An update to iPhone OS 3.0 that will be released in the summer will give iPhone 3G owners the ability to send and receive MMS (multimedia messages). Pictures fall under the category of MMS. This will only be for the iPhone 3G, not the original iPhone.
A current workaround is to send pictures to a phone's email address. For example, a cell phone with a phone number of (123)456-7890 would have an email address of 1234567890@carrierserver.com, where carrierserver.com is the carrier's domain. You would have to find out which carrier the recipient is on, and what that carrier's emailing domain is.