As I commented on the tag proposal page, I agree totally with Allen's
suggestion to do the tag support, leave categories alone for now, and
we'll think about whether to do categories based on tags later.
Tag-based filters, as Allen mentions, and views/feeds based on them is a
very strong facility. My proposal for tag-based categories is basically
just allowing using a stored *named *tag-based filter defined by the
site author as a category; authors typically like to impose some
structure on their own sites. In my proposal I do support hierarchy,
but admittedly hierarchy seems always to be used by a fairly small
percentage of ultra-structuralists; there are good arguments for
supporting it, but it is an aspect that could conceivably be cut out
there too.
Regarding stemming: if you do stem, you'll may want to store the
original and stemmed tags, and have an option whether to use stems or
originals in the search/clustering. The equivalence classes based on
Porter stemming can be so coarse that they yield some surprises to users.
--a.