Please note that 2.3, not yet released, does add tagging to WordPress.
There’s a long story about tagging and categories. One difference is that Categories have hierarchy, Tags do not.
Please consider reading through some of the recent discussions on the wp-hackers email list:
http://comox.textdrive.com/pipermail/wp-hackers/2006-September/008189.html
http://comox.textdrive.com/pipermail/wp-hackers/2007-April/011894.html
