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Over on, Matt has announced a new feature to get people using the new tagging system more: Category to Tag converter.
Here’s why from the blog:

Since launching tags the other week we’ve had a fair number of people who wanted to redo their categories as tags, probably because you have a bunch of categories you’ve only used once or twice.

This totally makes sense to me, and something I hope to see in an upcoming version of WordPress, as I have many categories I have only used here or there that would make better tags than being another category in the list.
I can’t wait to see how categories and tags are used by WordPress bloggers now that it is part of the core. Before when you had to add a plugin to get the feature, there was a barrier for entry, but no longer. The only issue now is making sure everyone adds tag display to their themes.