i believe it's data, because only iphone users can use it, so i don't think it's actually like texting.
edit: actually i believe it's both. if it's to another iphone, then data. if it's to a non iphone, then it's a text. that's my understanding, but i'm not positive.
It's mostly data.
If you have iMessage activated, "texts" to iPhone users (who also have iMessage activated) will use data. They will not count against a text message "allowance". But they will count as data (albeit a small amount if you aren't sending pictures).
Messages to non-iPhone users will be sent as SMS and will not count as data.
You have the option to turn iMessage off if you are concerned about data usage.
Settings > Messages > iMessage > make the slider white instead of green.