just looking over the issue that you have there are a couple of usefull tips i have for you when dealing with a device that is not recognized in itunes.
1. AMDS (apple mobile device support)
certain times it will shut down making it impossible for itunes to see the device when plugged into the computer.
course of action restart AMDS http://support.apple.com/kb/TS1567
2. you can also go through the device manager through the my computer properties and reinstall the apple mobile device driver as well.
click the start button> right click on my computer> click properties> go to device manager> find the universal serial bus controller > find the apple mobile device usb driver if it shows an error uninstall then right click the universal serial bus controller and look for new hardware.
3. also try by reinstalling the itunes from getting a bad download.
follow the steps in this article http://support.apple.com/kb/HT1925
you will need to delete 6 different computer programs by going into control panel and uninstal programs.
this is the order that you will need to delete them in.
3.apple support update
4.apple mobile deivice support
6.apple application support (itunes 9 or later)
as for group texts and photos that may be something your carrier may need to take a look at.
group texting still should be available but the photos are sent by mms messaging which is controled by your apn settings.
these APN settings can only be controled by your carrier.