In the above image, see how the Left device is synced with Twitter, the Right is not despite the same settings
Here's another issue we're hearing a lot of today and which we verified our-self. Seems as if Twitter contacts are not showing up in people's People Hub, regardless of the settings/filter chosen in the setup.
Indeed, we took a look at our Dell Venue Pro and this is the case. However, on our Samsung Focus (loner review device from Microsoft) our Twitter contacts are just fine. We're not too sure what to make of that one.
To test it yourself, simply go to your contacts in the People Hub and see if you can find any Twitter-only friends. Or if you have linked accounts, try to see if they have their Twitter "What's New" option visible (like above). We've even tried delete and re-sync our Twitter account with no success.
Hopefully this is something that Microsoft LIVE and Twitter can fix on their end. We'll keep you posted. Meanwhile, feel free to commiserate in our forums to discuss the matter.
Update: From @winphonesupport "If you're not seeing your Twitter contacts in your People Hub, hang in there, we've got a team looking into it. Thanks everyone!"
Thanks, Martin and Jonathan, for the info