It seems to work both ways for me as well. Though the picture still shows up as a slideshow. It took me till today to figure out how to save the picture! (i've had my phone for 3 weeks, 2.1 update for a day.)
I've noticed there tends to be issues with picture mail in general, all my picture mail contacts are also on Sprint, and sometimes we just don't receive them from each other, even when I was still on a dumb phone.
Before the update I was not able to receive any picture mails, but since I downloaded the update yesterday everything works on my phone 100%. I can receive picture mails! The update fixed everything on my phone! Good luck with yours!