Twitter CEO Dick Costolo unveiled Twitter's hotly-anticipated photo-sharing service at All Things D's D9 conference today in Rancho Palos Verdes, California. Already, tech pundits are enamored with the service's potential, Gizmodo's Matt Buchanan calling it perhaps "the most important photo sharing service in the world." At the conference, Costolo said the company had to "remove the friction from adding photos to Twitter" as the service will no longer rely on third party services like yFrog and TwitPic to upload pictures. "A native photosharing experience will be rolled out to 100% of users over the next couple of weeks," he said. So why is the update such a big deal? Details following the demo video:

Features  "The service means that photos and videos will be directly connected to tweets," writes Mashable's Chris Taylor. "They will be viewable on Twitter.com without having to leave the site. Twitter will also surface the most popular videos and tweets in a new section of the homepage." The feature is powered by Twitter partner Photobucket. Additionally, the company rolled out hashtag photo clouds, where typing in a tag, such as #rocketlaunch, will display all the photos uploaded to Twitter with the given tag. A big concern many had initially was whether Twitter would own the copyright of everyone's photos. Rest assured, "users will own the rights to their photos on Twitter," Costolo said. Puting the most positive spin on the new service, Matt Buchanan  put it in perspective of other photosharing services. "Sure, Facebook's the biggest photo sharing service in the world and Flickr's the one people with photoboners use," he writes. "But I think Twitter's effectively become the most vital. Which sort of seemed inevitable, in bits and pieces. The photo of the plane that went down in the Hudson, or what became the iconic photo of the shuttle launch, snapped from a phone on a plane. Those were on Twitter, not Facebook or Flickr. We didn't stay glued to Facebook during the Japan tsunami or the revolutions in the Middle East. And the next time something insane or truly breaking happens, we'll probably watch it on Twitter again. But we'll get to really see it."

Shortcomings  The ability to upload pictures to Twitter instantly will only be available to smartphone users at first but the company is planning to roll out the feature for dumbphones in the near future. Besides that, the only downsides are for photo-sharing services yFrog and TwitPic. "It's not exactly a good day for anyone that placed their bets on a Twitter-linked photo service," writes Donald Melanson.