Am I doing something wrong? What’s happened to my Tiny URLs?
Is it something to do with this question?

Why does the settings screen warn me that I don’t have a URL shortener plugin?

Answer to Why doesn’t STC have an URL shortener

Simple Twitter Connect does not implement a URL shortening service in favor of letting other plugins implement one for it.

WordPress 3.0 includes a new shortlink method for plugins to implement this properly.

A shortener plugin should implement the “get_shortlink” filter for it to be detected. WordPress 3.0 will be required for this to work.

The WordPress.com stats plugin implements this, and it provides shortlinks to “wp.me” URLs. If you wish to use another shortener plugin, tell that plugin’s author to implement this same standard, and the plugin will automatically be detected and used by Simple Twitter Connect.

But I don’t get that message?

Aha, I think it’s a time delay. Let’s try this.

1. Publish the post
2. Wait briefly until Twitter Publisher has populated the Tweet this: text area
3. Then click on Tweet.

If you are updating a post then you need to Update it first.