According to a recent Pew Internet & American Life survey 28% of internet users, 7% on any typical day have have tagged or categorized online content:

Tagging is the process of creating labels for online content. The mechanics are simple on most tag-centered websites. After creating an account on a site like flickr.com you can upload your own pictures to the web site and label them as you see fit – for instance, labeling a picture with a setting sun in it as "sunset." You can also search the site using keywords and, when you find photos posted by others that you like enough to want to retrieve later, you can apply your own tags or labels to them. That might mean that you call someone else's picture "sunset" even though he originally labeled it "clouds." Then, from any internet-connected computer you can go back to flickr.com and find all the material you have tagged -- both yours and the material from others that you've labeled your own way.

Not only can tags be personally useful to people who want easier ways to retrieve information and content that appealed to them, but they also have a social dimension. Your tags on flickr are added to the millions of other labels on the site; that allows flickr to organize information better for other searchers who use those keywords -- making this a classic example of bottom-up building of categories instead of top-down imposition of categories.