Am I wrong, or wasn't there a screenshot utility released in one of the recent PS3 updates?  It needs the game to support it right?

Yes the game most support it.

Developers have to Implement it, it's on a game to game basis

Don't take this as flaming, because I'm just curious, but why do they need a screenshot utility if individual games must support it? Halo 3, Gears 2, and Brawl all have screenshot functions, and their respective consoles do not need special software to support it.

I don't think any games support it presently.

The PS3 doesn't need it for its games to be able to do it; MGS4 can capture screenshots already.

I guess it just makes it easier for devs to implement.

because it's just like the trophy's..when the games were made, it didn't exist, so it doesn't work.  Games from now on will likely all include the feature.

wipeout HD

Yup.. it even has editing tools.. you can change a bunch of things.. and add motion blur and stuff..

It is now a standard function in the api.  Halo, Gears, Brawl, Wipeout, MGS4 all had to develop their own screenshot functionality.  This was a similar issue with custom soundtracks, some games supported them before the 2.40 firmware.  I really enjoy this feature.  I hope a lot of future games enable it.  It's not a system selling feature, but it is definately a nice to have feature.