I completely disagree with this approach - You should not be using TAGS or anything else for that matter "strictly" for SEO.
But tags are good! Why? Because (If used correctly and not for search engine reasons) they help users find more articles on your blogs on the same topic. It is kind of like a "related articles" button.
Even better on social networking blogs like REW Blogs or Active Rain, Tags allow you to be found on other people's blogs. If write a great article on real estate web design and tag it as such, and another person has already done so - when the reader of their blog sees the tags and wants to read more articles, they will click and be shown yours and everyone else's articles tagged in the same manner.
They do help for interlinking - but that should not be why you use them, think of it as a fringe benefit.
Quote:
Originally Posted by Smuck
I've started using tags for one reason, and that's indexing. Tags provide one more vehicle to link to a blog that is buried in the site somewhere. A tag will provide a link from the home page of your blog site to the blog entry you wrote months, perhaps years ago!
If a visitor was reading your latest entry on 'widgets' and wanted to read more about widgets, then certainly the tag will be helpful to the visitor, however, IMHO, the greatest value of tagging are the linking benefits.
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