Well, not so fast my friend. As this Macworld article notes, there is a bit of a glitch in getting this working. Read about the glitch at Macworld. Their workaround is a bit kludgy, but it certainly works.

But there has to be a better way, right? I’m glad you asked. In iPhoto ‘08, make a web gallery from an event. When the configuration options pop up, be sure to select “Allow photo uploading by email” and “Allow visitors to upload photos.” (Don’t worry, you can disable this later if you want.) Click “Publish” and let it do its thing. Now, on your iPhone, select a photo to upload. Bring up controls if they aren’t visible already and tap the Share button on the lower left. Select “Send to Web Gallery.” Now you should see your Web Gallery listed. Select it and then craft your posting email in the resulting window.

At this point, it is safe to disable visitor uploads in the Web Gallery properties in iPhoto. Subsequent Web Galleries created in iPhoto do not need to go through this process; you may create them without visitor uploading enabled. Now, your Web Galleries should be good to go on your iPhone. Comments welcome.