"A December 2006 survey has found that 28% of internet users have tagged or categorized content online such as photos, news stories or blog posts. On a typical day online, 7% of internet users say they tag or categorize online content.
Tagging is gaining prominence as an activity some classify as a Web 2.0 hallmark in part because it advances and personalizes online searching. Traditionally, search on the web (or within websites) is done by using keywords. Tagging is a kind of next-stage search phenomenon – a way to mark, store, and then retrieve the web content that users already found valuable and of which they want to keep track. It is, of course, more tailored to individual needs and not designed to be the all-inclusive system"
Pew Internet and American Life project: Tagging
The report also goes into the definition of tagging as well as who tags and there's an interview with David Weinberger on 'Why Tagging Matters'.