Any phone running iOS 5 which also has iMessage enabled (Settings -> Messages) will automatically have its phone number associated, much in the same way as FaceTime. In addition, also as with FaceTime, you can add other email addresses where iMessages can reach you.
However, while you can send a message to multiple iMessage recipients or text message recipients, trying to mix and match ends up falling back on the lowest common denominator. So, if you send to multiple phone numbers, and even one of them isn't associated with iMessage, you'll end up sending SMS messages to all of them. If you include an email address among your group, that contact will get an email message instead.
There are a few other nice additions to iMessage, besides the whole "replacing SMS" aspect. For one thing, because this is a smarter, more modern system than text messages, it can add features like the ability to tell you when a contact has received and even read a message. (If you're squeamish about having others know just when you read their messages, you can deactivate that option in Settings -> Messages.) As in iChat on the Mac, you'll also get a little word bubble with an ellipsis in it while the other person is composing their message.
Overall, iMessage is probably not something the wireless carriers are thrilled about, but it's hardly a new idea. RIM has been doing a similar thing with BlackBerry Messaging (BBM), and Android users can get similar functionality with Google Voice, Google+'s Huddle features, or third-party apps—some of which are available on the iPhone, too.
iMessage is not quite a replacement for instant messaging or text messages, but the fact that Apple has combined the two into one app, rather than creating an iMessage app that's completely separate, is a smart move, and one that may hasten the demise of SMS.
While this all may be a poke in the eye to carriers like AT&T and Verizon, it also encourages messaging fragmentation by raising the old standards problem. When all your friends have different smartphones, will we still be reliant on SMS and MMS to send our messages? Or will we have to rely on email or a third-party solution? Or, hope against hope, can all these various manufacturers and software developers find a way to live together in harmony?
By the way, I wouldn't bet on that last one.