[Dana]

Tags are important to blogs. Tags help your blog get noticed on the blogosphere directories like technorati.
A technorati tag will help people find your blog in the technorati directories.
other tags are great too.
Social bookmarking helps you tag as well.

To get technorati tags into your blog, go to technorati.com and get your Tag.
There's a tag generating tool on the homepage that lets you type the word you want and retrieve the tag. (Once you've done this a few times, you'll be able to write your own without even thinking)

You can either lump your tags together at the bottom of your blog entry like I used to do underneath a border or a better way for me was to incorporate them into the body of my blog by simply writing the html code into the blog. If I used the word writing, the tag became a clickable link. (I found this to be a much cleaner option.)

[Ajay]

If you are using WordPress, I recommend Ultimate Tag Warrior

[Tucker]

Originally Posted by Ajay

If you are using WordPress, I recommend Ultimate Tag Warrior

I don't understand exactly what that plug-in does, but it sounds like it might be very useful. Could you explain to me what it does?

[Ajay]

Tags are keywords pertaining to your post.

UTW helps you define these keywords. It also pings Technorati with them, so that Technorati knows that your post is pertaining to so-and-so keyword.