Twitpic is facing criticism for making changes to their terms of service to include a clause which it is feared will mean that they are able to sell photographs which they are hosting to newspapers, magazines and the like.
If you do actually read the terms they’re surprisingly clear and not as confusing as Ts & Cs usually are. They say that the copyright belongs to the photographer, they just retain the right to distribute the image for the time that it remains on Twitpic before it’s deleted. After that, they might keep ‘ghosts’ of it on their servers but they don’t express any interest in distributing it further.
Noah Everett, owner of the service has tried to be as transparent as possible, it seems, and Twitpic has stated that they only changed the terms to make them clearer and to prevent news corporations from taking advantage of the thousands of images which are posted daily by redistributing them beyond “the acceptable Twitter “retweet” which links back to the original user’s content page on Twitpic.”

Noah Everett, photo courtesy of twitter.com/#!/noaheverett
While Twitpic are preventing third parties from committing copyright theft the clauses don’t prevent Twitter from using your images any way they like since they have signed a deal with the entertainment picture agency WENN.
Although the Twit prefix might make you think otherwise Twitpic has no official affiliation with Twitter so while Twitpic is the best known and well established image hosting service for Twitter what you agree to when you submit content to one has little or no impact on what happens on the other.
If you’re thinking that you’ll migrate because of terms you find unfair, cool your jets, all the short URL image hosting sites have similar terms of service. If you’re really worried about copyright theft, use a service such as flickr, watermark your image and then run the URL through a URL shortening service. You could, but why bother? No-one’s going to steal your grainy picture of you and your mates meeting some-one who was once on some reality TV show, if you’re photo is really that newsworthy you’ll already have sold it to the tabloids right?
Now relax and carry on as normal Shutterbug!