I just came across this news from bharry's blog. This is a great news for testers to create bugs and improve their productivity !
Heres the contents of the blog...
I just got mail from TechSmith - makers of SnagIt! that they have added support for Team System. Being an occasional user of SnagIt! myself, I tried it out on our dogfood server and it worked like a charm. SnagIt! allows you to take screenshots and then automatically create a bug with the screenshot attached at the click of a button - very nice. SnagIt! also has powerful capabilities for editing/annotating the screenshots. It's a nice tool. Check out the new update at: