Green messages on your iPhone use a voice text protocol called Short Message Service (SMS). SMS was developed way back in 1982 and designed to run on voice networks using a separate channel used for signaling. Technically SMS was easy to implement and, with the popularity of mobile phones, it became very popular really fast. Messages are limited in length 160 characters and as a result many of us have learned to abbreviate words using text-speak shorthand.
iMessage is different. It's Internet Protocol (IP) based and does not require a voice connection. You can use IP based text services like iMessage on cellular data networks along with WiFi networks and your computer.
Now here's the big advantage - you don't need a text message plan to send and receive iMessage based texts. You do need some kind of text message plan to send and receive SMS (green) messages.
When are messages green? Here's a few common scenarios:
- You or your friend have not updated your iPhone to iOS5
- You or your friend are not registered with Apple iMessage.
- You or your friend are in a place where there is no cellular data signal but there is a voice network signal.
- You send a message to someone not on the same network as you and only one of you has an iPhone. For example, you've got an AT&T account and your friend has a Verizon Wireless account. If you both have iPhones and both have data connections iMessage will work cross-carrier.
- You're on the same network but one of you has iMessage turned off. To turn iMessage on and off on your iPhone use Settings -> Messages -> iMessage On/Off