There are several ways to arrange WordPress website content. By categories, by dates and by tags. Even tagging is one of the most powerful one, it's not always easy or straightforward.
By using tags you have a powerful way to break down the content on your website. This break down can provide different paths to your content for both humans and search engines. This break down becomes more useful to humans if you link words or tags within the main content.
All categorizing methods bring duplicate content problem. You can use Robots Meta plugin for date archives to use “noindex/follow” robots tag. For category pages you can use Thesis theme's functionality, teaser plugin or “more” tag to show only teaser content.
This break down of content is extremely effective for targeted advertising or affiliate links.[Source Graywolf's SEO Blog – How to Use Tags on Your Blog or Website]