I realized a bunch of people dont know how to setup mobile blogging (MMS/SMS) for the iPhone. So here is a short step by step.
Prequisites: iPhone must be updated to OS 3.1, use iTunes to make sure you have your phone completely updated.
Step 1: Go to http://www.blogger.com/mobile-start.g and follow the instructions for setting up MMS. You DO NOT need to follow the instructions for setting up SMS.
Step 2: Once you have setup your mobile MMS account for blogger, and linked it to your blog, go to your iPhone's 'Settings' app.
Step 3: In the Settings, navigate to the 'Messages' option
Step 4: Turn the 'Show Subject Field' on. The subject will show up as the title of your blog post.
Step 5: Try it out! Just open up your sms/mms area on your iphone and send an sms/mms message to firstname.lastname@example.org
You should receive a txt message from email@example.com confirming they received your message.