Technorati! Its a search engine... for blogs!
I'm kind of surprised that this resurgence of 'tagging' is somewhat effective. It was tried before - look up "meta" tages in html for instance. The idea was that the creator of a page would specify some keywords and whatnot so that the search engines and so on would have an easier time digesting the site. They are still used, a little, in conjunction with the other site attributes. In the innocent days of the web they were trusted explicitly - this was a main method of making your website climb up search results for unrelated results. If, circa 1998, you ever had hardcore pornography creep to the top of the list while on a search for, say 'honda civic muffler', you were probably the victim of intentional meta tag spam.
This current tagging fad is basically the same thing. It doesn't tend to be so bad largely because the wide search engines of the world basically ignore them and the communities within which they are used tend to be somewhat moderated.
One thing that does make me chuckle about tagging in general is that it takes the library idea of a controlled vocabulary of topics and throws it completely out the window. The opposite is occuring - the individuals are tagging things however they they want, and they seem to be happy.