What you have to do is highlight ("select") the name once you have typed it, and then press/click on the "tag" icon which is above the message/text box, on the right hand side.
I think you have to be in full "reply" mode, not quick reply.
I find I now have to press the tag icon twice to get the tag to work - but that may be an iPad thing.
You know that the tag has worked if the username is highlighted when in preview mode or once the post is submitted. Some names are highlighted in different ways, if they have a particular role with the forum.
I generally preview all my posts first, to check for typos etc (not that I always find them...!).
Hope this helps!