I tend to try and think of a tag as a type of folder. EG. I store my expenses in EN so to add a receipt in a normal hierarchical system I would need to open : Expenses --> 2013 --> September Instead I have a main Archive notebook that holds everything and just tag the receipt September 2013. If I want to view all expenses for that month I can just click on the tag. One point - not sure if its the same on the desktop clients, but in the web interface you can nest tags many levels deep, not sure if this is a new feature but only noticed it recently.