Permalink : %tag% not working

Which version are you using? I am using WordPress 2.9.2,had same issue, here is the patch for ‘wp-includes/link-template.php’

*** link-template.php   2009-12-14 05:09:55.000000000 -0500
--- link-template_patched.php   2010-06-21 14:29:24.000000000 -0400
***************
*** 88,93 ****
--- 88,94 ----
                $leavename? '' : '%postname%',
                '%post_id%',
                '%category%',
+         '%tag%',
                '%author%',
                $leavename? '' : '%pagename%',
        );
***************
*** 128,134 ****
--- 129,151 ----
                                $category = is_wp_error( $default_category ) ? '' : $default_category->slug;
                        }
                }
+
+               if ( strpos($permalink, '%tag%') !== false ) {
+                       $tags = get_the_tags($post->ID);
+
+                       if ( $tags ) {
+                               usort($tags, '_usort_terms_by_ID'); // order by ID
+                               $tag = $tags[0]->slug;
+                       }

+                       // show default tag in permalinks, without
+                       // having to assign it explicitly
+                       if ( empty($tag) ) {
+                               $default_tag = get_tag( get_option( 'default_category' ) );
+                               $tag = is_wp_error( $default_tag ) ? '' : $default_tag->slug;
+                       }
+               }
+
                $author = '';
                if ( strpos($permalink, '%author%') !== false ) {
                        $authordata = get_userdata($post->post_author);
***************
*** 147,152 ****
--- 164,170 ----
                        $post->post_name,
                        $post->ID,
                        $category,
+             $tag,
                        $author,
                        $post->post_name,
                );

I had the same problem on wp2.9 and its still the same with wordpres 3.0.
I would also like to know if there is a reason for it.