I use twitpic for photo sharing in twitter, it is super-easy and integrated with twitterrific for the iphone. I looked into the service recently, and was really impressed to find out that twitpic is run by just two people and they are transparent about it. Kudos on being open. And they are 100% correct about the VC funding - if they can't be open and forthright about what hey're doing, they wouldn't be good candidates for the VC funding process anyway.
Update: seems like the Twitpic folks were victims of their own success. Good luck getting more bandwidth guys; and thankfully they were the only victims in this situation.
I'll be looking for you on twitter. Find me there at twitter.com/ejly.
Prior twitter tools posts: