Windows Vista has its own built-in tagging option for some file types, and you can add tags when you save an Office document, for example. But it doesn't work for all types of files; basic text files get left out, as do others.
By contrast, Taggtool doesn't integrate with other programs, and you can't use it to assign a tag when you save any given file. Instead, it sits on its own and runs from the system tray, and keeps all its tags and file information in its own database.
To assign a tag, you can either right-click a file and choose "Add Tags", or you can bring up the Taggtool program window where you can add one or more tags to multiple files at once. You're then able to search those tags from the program window, or using a search widget that displays be default at the top of your screen.
Search results display quickly, and you can filter by file type (such as images, Microsoft Office, or Audio), or use hierarchical tags such as doc.work or doc.home to help organise things. Plugins allow for previewing some files, such as .pdf's or audio files.
The Java-based Taggtool offers many options, such as integrating with Del.icio.us or defining particular programs you can then use to open any selected file in search results. You can also use it to create a backup of all your tagged files. But you probably won't be able to figure out what everything does without a trip to the app's online help.
If you have a growing trove of files and you're becoming comfortable using tags in other programs, Taggtool could help you manage your data. But you'll need to be willing to take the time to manually assign tags to everything.