It was earlier reported that most owners who have problem with "Waiting Activation Error" either because the devices are new (as compared to others who bought much earlier) or they have updated the "Carrier" during the Restore or Upgrade firmware process.
I suspected its due to "Carrier Update" because I encountered this message earlier today when I attempted to upgrade my Firmware to 4.2.1 but I chose to ignore. However, it proved to be wise because when I tested Facetime - it works!
I heard some iphone owners (Celcom customers) who chose to upgrade their "Carrier" is unable to get their Facetime feature back.