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:

http://www.techsmith.com/community/blogcomments.asp?thread=356