Here is Facebook engineer Tom Occhino’s explanation of the new feature:
Now, when you are writing a status update and want to add a friend’s name to something you are posting, just include the “@” symbol beforehand. As you type the name of what you would like to reference, a drop-down menu will appear that allows you to choose from your list of friends and other connections, including groups, events, applications and Pages. Soon, you’ll be able to tag friends from applications as well. The “@” symbol will not be displayed in the published status update or post after you’ve added your tags.You can learn more here and here.
Friends you tag in your status updates will receive a notification and a Wall post linking them to your post. They also will have the option to remove tags of themselves from your posts. We hope that tagging your status updates and others posts from the Publisher will enable you to share in a more meaningful and engaging way, and connect with even more people. We’re rolling this feature out over the course of the next few weeks, so you may not see the new feature just yet.