  Room-temperature ferromagnetism has been recently discovered in Co-doped
TiO$_2$ rutile. Our $ab$ $initio$ density-functional theory investigations show
that the substitutional Co ions incorporated into TiO$_2$ rutile tend to
cluster and then the neighboring interstitial sites become energetically
favorable for Co to reside. This suggests that a Co-doped rutile containing
only substitutional Co is not an appropriate reference bulk system in
derterming the local environment of Co in polycrystalline (Ti,Co)O$_2$ rutile.
We also find that the interstitial Co is in the low spin state and destroys the
spin-polarization of the surrounding substitutional Co, hence reduces the
average magnetic moment of impurity atoms.
