The process and service of tagging has come up when I first attended the business blogging conference in May and more recently at Pub Sub Concepts meeting. Del.icio.us is the online web entity often associated with tagging. Del.icio.us is a "shared memory" site, where Internet bookmarks are shared with one another.
If a user adds a site of interest or just provide relevant link to their Del.icio.us list, they are in effect "tagging" it, making those sites easier to find for users with similar interests.