The syntax is @username so you've got that right.
If you type @username (or @ followed by the first part of the user's name) and then immediately stop typing for a few seconds, a box will appear with one or more user's avatars and names. You can select the name you want in your message.
If you go on typing without a pause or if there are no matches to what you've typed, then you won't see this information box. If the @username is correct, you'll still see the link after you send the message. If the @username isn't perfectly correct, the link won't be created.
I don't think lower and uppercase is important -- I see my name in the info box whether I type @ DeeAnna or @ dee or @ deeanna (that is when I leave out the space after the @ sign). The more complete my name is, the shorter the list is.