Tim has a good point in that most of these comments are over excitement about nanotech/nanotox. Granted you can point to author's affiliation with nano interest, but you can also point to other toxicologists interest at keeping the funding coming (which is unfortunate but a real phenomenon). TiO2, like many have said, is used in everything from toothpaste to cat food, and granted that isn't nano-scale, but still carries some of the same characteristics.
Also, about those thinking this is going to create super bugs, its important to note that physical destruction of microorganisms is not something easily adapted to like antibiotics which target specific cellular processes. Personally, I have yet to hear of a bug that can live through a 10% bleach exposure(except for certain spores). This paper is a similar concept, and although this paint idea is nothing new, I think the greatest application of nanoTiO2 aside from photovoltaics, is using it as an immobilized film in water treatment parts, thereby killing microorganisms without the addition of those chemicals everyone hates. This of course would help us re-use our water, which is one the biggest overlooked challenges of the future of our country.
And lastly, about people being all worried about its toxicity to humans, please keep in mind that anything can kill you in the right doses, so unless a study has some reference compound to judge it by, don't take toxicity to mean its bad. Hell, sand can be bad if its the right size and shape.