Yes, it's finally here. Twitpic has added the photo tagging feature that allows you to add twitter names of you and your friends to each pic! People have been asking for this feature for some time.
Again, you can now tag your friends on twitpics to your heart's desire. Just don't twitpic and tag Lebron James getting dunked on, because you may be out of a camera or phone.
As shown on Mashable, it's pretty easy to use.
You have the option of sending an @ reply to the person tagged, which is always a good move out of common courtesy (since everyone doesn't want to be tagged). This coupled with the recently announced feature of organizing photos by event (a la Flickr), shows twitpic is trying to separate itself a bit from others in this field.
Let me know if there are any glitches when tagging.