You don't have to look far these days to see keywords (or tags) sitting there on the page, begging for you to click on them. Blog entries, photo albums, profiles, links, it seems everything has been tagged with something or other. But what is this?
A tag is a very basic form of classification, consisting usually of one or two words that describe a particular piece of data. Whether that data is a photograph or a blog entry, it doesn't really matter. By tagging you have applied a very basic and lose form of categorization.
This categorization or grouping can then help others find other related items if they want to explore further. For example, this entry here has been tagged with a number of tags that you can see at the bottom of this page. But what happens if you click on one? If you click on say, "tags" you will be taken to a page that lists all the other blog entries that have also been tagged with this. This helps your readers to 'surf' in the traditional web sense around all your content finding relevant content.
So tagging within your own blog while powerful and useful, becomes an even greater tool when your tags are used by others outside of your blog. When you publish an entry, and the web pings go out, various search engines and aggregators come and read your content. Included in this content are the tags for each entry. Services such as Technorati provide a huge window into the blogging world by primarily offering tag based browsing. Blog-City offers a window into the most popular tagged entries through their community pages.
You can quickly see what the most popular tags are. In other words, what common subjects are people blogging about. By tagging your content, you are contributing to this larger picture, enabling people to easily find your entries by very nature of association.
Tagging can be a very useful tool to help both your current readers and to help attract new readers to your blog. Be careful to tag using relevant words and don't go too deep, or use too many. Take a look at the aggregators such as Technorati or Blog-City and see how others are tagging, and what type of words they are using.
Tagging is quick, easy and most of all, painless.

Update: Once this entry was published, Technorati found it via the automatic web ping and displayed this entry with others, in their main index. Looking at the blog statistics for this blog, we see a number of extra readers from this inclusion. This is a good example of how tags can generate further traffic.