I am really confused. The announcement says that emailing from iPhone to facebook directly doesn't work on the iPhone.
I just took a new picture and tried it again to make sure I'm not crazy. It uploaded fine into the mobile uploads section.
Or does this service upload into different albums instead of mobile uploads?
What kind of email account do you have setup on your phones? Maybe a popular service is botching something on the server side for some reason?
I am using a gmail account with a custom domain -- and it works.