If it is, you'll see the email address, phone number, or (if the address is in your contacts) person's name light up in a blue bubble, acknowledging that you can go ahead and compose your message. In the future, when you type that person's name or email address, you'll see a little blue chat bubble next to it in the drop-down menu, signifying that this contact is iMessage-enabled.
If you've typed in an address or phone number that does not correspond with an iOS device, one of two things will happen, depending on which iOS device you're using. If you're on an iPhone, your outgoing message will change into an SMS (or, if you're messaging a group, a Group MMS), and your contact's name will highlight in green. If you're using one of Apple's other iOS devices--an iPod touch or an iPad--your contact's name will light up in red with an exclamation point next to it, and you won't be able to send anything. When you get into a conversation with someone on an iPhone, you'll be able to tell whether it's an SMS/MMS or iMessage conversation by the color of your chat bubbles; green for SMS, blue for iMessage. On other iOS devices, the chat bubbles will stay a lovely shade of blue at all times.
Like MMS messages, you can send text, photos, video, contact cards, and map locations to a fellow iMessage contact. You can also carry on chats with a group--though be aware that you'll need all your group members to use iOS devices; otherwise, you'll fall back to an MMS message (on an iPhone), or the chat will fail.
iMessage offers a few neat extras for users: If you enable the Read Receipts feature, your contacts will be able to see when you've read their messages; and if you're carrying on a lengthy conversation, you'll be able to see when your friend is typing, and vice versa, thanks to a gray "thinking" bubble.
The iMessage app also offers a bit of animation: If you want to consult a point earlier in the conversation but you have the keyboard open, you can just scroll upward; the keyboard will intelligently slide down into the bottom of the screen.
Because iMessage uses 3G and Wi-Fi to transmit its messages, it's occasionally not the most reliable to use on an iPhone in the case of a natural disaster or 3G outage. This is where the Send As SMS toggle comes into play: If you have this option enabled, you'll be prompted to send your message as a traditional SMS instead in the event that the iMessage app can't transmit something over a data network.
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