This is actually pretty simple once you know how...
Just use register_taxonomy( 'people', 'post', array('rewrite' => array('slug'=>'people')));
In your templates functions.php to make the template aware of the taxonomy. Then you can use all the taxonomy functions to add/remove/associate posts to terms in the taxonomy (you'll need to look at wp-includes/taxonomy.php.
Then if you want to use url variables to do something you have the url http://www.blog.com/people/person and can access the 'person' by using
This allows you to have any number of http://www.blog.com/taxonomy/term type situations.
Still looking at how to use similar functionality of tags (tag+tag etc) without rewriting all the functions. Still think this should be in wordpress by default - drupal does it really well.