Subject: Why is light bent near massive objects and describe a photon's life

Part I: I've heard two theories on why light is bent near massive
bodies - 
1. Massive objects warp the curvature of space, so that even though
the light thinks it is travelling in a straight line, it is moving  in
a curve to an observer.
2. photons don't have real mass, but do have an "effective inertial
mass" from their energy. This inertial mass is equivalent to a
gravitational mass and so photons are affected by gravity.
Question: Which theory is correct and can you explain a bit more? I
only know a little about each ( I have first-year special relativity
and a bit of general)

Part II: A friend of mine asked me a question I couldn't answer: What
is the speed of light in a photon's reference frame? Does time and
space exist from the point of view of a photon (and it's reference
frame)? 

Thanks for your help!
Sarah
PS - I love the site.

Re: Why is light bent near massive objects and describe a photon's life