Xperia X10 :: Can't Seem To Access Contacts When Sending Text Messages

When checking the online tutorial via AT&T's website it walks me through how to send a text message to someone in my contacts list from the text messaging screen. Once I start typing their name, it should start to automatically come up. When I try to do this on the phone, it won't do it. Do I really have to enter someone's phone number in order to do this? What if I want to add more than one person which is not an easy task either. I found where people are being told to download an app called Handcent SMS which will resolve the multiple people issue but what about accessing my contacts just by starting to type their name in the "To" line?