It has been part of the Muslim’s belief, based on traditions, that Prophet Muhammad was illiterate. God says in verse 29:51 that the Quran itself is the only miracle of the prophet. By alleging illiteracy for him, traditional Muslims were trying to make the claim even "more miraculous," for a book of such literary quality was sent down through an illiterate man. This is despite the many assertions in the Quran to the contrary. The first Quranic revelation that came down to Muhammad is, "Read! In the name of your Lord who creates...." (96:1) It is clear that this is also a commandment. To all of us, including the prophet, God stresses the importance of literacy in the very first revelation. Furthermore, the second revelation is "The Pen" which indicates again the importance of written communication. This makes the importance of literacy even more compelling. If indeed Muhammad was an illiterate man when the Quran was first revealed to him, how could he not make himself learn to read and write during the twenty some years of his mission? Perhaps a more poignant question should be, "How dare he not to obey his Lord’s clear commandment to read and write?" Being a messenger of God, of course he would not dare disobeying his Lord.
http://www.submission.org/illiteracy.html