I'm a little late to the game in mentioning this application - as it has made its rounds around the Mac-Web a while back - but I'd be remiss if I didn't take a moment to link to it and let you know my thoughts. Right?
I'm a tagging freak. I believe tags are the best way to help organize data into miscellaneous piles of information. It gives us a non-hierarchical (that isn't a word, is it?) way that we can search for things later. Yes, I've read Dave Weinberger's book Everthing is Miscellaneous. I told you; tagging freak.
Apple has, in their own way, provided support for tagging in Mac OS X. They have a field in their metadata for files called "Spotlight comments". Or, 'the words you'd like to use to search for this file using Spotlight'. So if I have a document that, for whatever reason, is about my cats Pickles and Pookers but - somehow - does not mention them inside of the file by name or in the filename itself, I can add "Pickles Pookers" to the Spotlight comments area and presto! - I can search Spotlight for either of their names and find the file.
Tags, on the other hand, adds a certain UI to this process that I think Apple should have done from the very beginning. From inside of any Applescript-enabled application (which is a lot of applications) you can invoke a UI to help you add some tags to that file. You can do this in Mail.app, Finder, inside of iPhoto, and even on bookmarks within Safari. Then, you can do specific searches in Spotlight later for those tags. The screencast on the home page for Tags does a good job of explaining what the application does and what it allows you to accomplish.
Source: Tags Overview.