Looks like it's confirmed in the terms and conditions that MMS are now being charged for.
Inclusive Messages and Message Charges
1. Inclusive messages on O2 Pay Monthly tariffs (including iPhone tariffs) can be used for unlimited:
*texts sent in the UK to UK mobiles,
*(for 2009 Pay Monthly tariffs only and not 2010 tariffs), texts sent from abroad (including Jersey, Guernsey and the Isle of Mann),from your mobile phone for private, personal and non-commercial purposes. This excludes international texts. You may not use your SIM Card:
*in, or connected to, any other device; or
*in a way that adversely impacts the service to other O2 customers.
If O2 reasonably suspect you are not acting in accordance with this policy O2 reserves the right to impose further charges or disconnect your SIM or tariff at any time, having attempted to contact you first.
2. Inclusive messages on O2 Pay Monthly tariffs can not be used for:
*premium rate messages where special charges apply,
*sending messages from the UK to international numbers, these are charged at 16p, except for customers subscribed to Discount Country or ITS who will be charged at 12p; or
*any chargeable messages you receive.
3. Picture messages or video messages sent to UK mobiles will be charged at 20p per message.Interestingly it don't separate that condition for new or old contracts either? So are the old contracts going to be charged for MMS as well? I suspect not and it's just the way o2 has written the terms, but according to those terms we will be charged!
Terms & Conditions