I have Android phone and use Handcent SMS. I have gotten group texts from iPhone users who use iMessage and I can see what everyone is saying, but when I try to respond I only get a loading circle that just keeps spinning and it ends up saving as a draft and doesn't send. Is there a way to fix this?
GoSMS Pro will allow you to group message (including adding pictures) just fine to iPhone users. Just tried it and it works great! Messages come back as single addresses but that is because they are sending via iMessage. All people in the group do get them however. And as an added bonus, you can add GoSMS emoticons so you can send and see emoticon smiley pictures from your iPhone friends!
You can reply to iMessage group chats by using the Android 4.2 stock messaging app, GoSMS or possibly other SMS apps. I personally used GoSMS until the Android 4.2 added group messaging. GoSMS worked great, it wasn't perfect, but it did work. I don't think Handcent supports group messaging.
Your issue seems to be related to sending MMS messages. Can you send picture messages with your carrier's plan?