Robin Good has put up a great overview of ethnoclassification/folksonomies - including a good list of strengths and limitations.
I think the limitations (primarily regarding ambiguity) would be largely mitigated through the use of two approaches:
- Tag autocompletion at entry time
- Rich and dynamic synonym matching at search/retrieval time
Tag autocompletion could use something like the Google Suggest XMLHTTP request to provide you with suggested keywords for what you are entering.
Synonym matching would help pare down duplicate results, and merge different tag branches at search/retrieval time.
As an example of synonym matching, MacOSX 10.4 has a feature called Spotlight, which is a system-wide metadata searching tool. It's got synonym handling out of the box, so if, for instance, you're looking for "wallpaper", it will also return items related to "desktop picture" - even though you may not have known they are synonyms.
I'm keeping a list of links on ethnoclassification on del.icio.us.
UPDATE: Woah. This was post #500! Keep on bloggin' ...