All iPhones from 4 onward have FaceTime capability. (I just upgraded to the 4S this weekend but haven’t used FT yet)
You need to go to settings to enable it. Evidently it is turned OFF by default.
I assume you’re familiar with the settings icon (the gray and white cogs and wheel)
Click on it, then click on PHONE and then click on FACETIME and turn it on.
Your Granddaughter should also have an iPhone with FaceTime enabled.
FYI. For any future questions, your iPhone comes with free phone support and its great. ( Or give us a try at Fluther again. But the phone is probably quicker.)
No long wait time, no outsourcing to other countries, and people who know what they’re doing. It’s great. Anytime I have questions about anything, no matter how minor, I give them a call. They are unfailingly friendly and helpful and love helping clueless technotards like myself. I just got off the phone with them myself.
Just dial: 1–800-MY IPHONE