It might be easier to create two new categories and than assign your posts accordingly.
Its not really possible. I basically need a way to filter posts through tags. So not actual way to display say tag id 01 or tag id 02
Yes – if you’re up for creating a custom query in a custom Page template.
However, I’m not sure how this differs from the display that would be generated when people clicked on, say, the “Paid applications” tag. If that’s all you want with the addition of a menu item that you can display on your nav bar, then perhaps a quick and easy way to get your listing up and running would be to create & publish two empty pages called “Paid applications” and “Free applications”. Then use the Page Links To plugin to redirect those two empty pages to your specific tag listings.