To use the emoticon collection present on the iPhone, you must install a new keyboard using the language "Emoji". When you switch to that Emoji keyboard (using the planet key next to the numerical keypad switch), the keyboard turns to a collection of emotes to choose from.
Here's how: On the iPhone you must go to Settings -> General -> International -> Keyboards and add the Emoji keyboard. Then it's as if you were switching language while typing in iOS.