Tags on Hubpages help the website group together related hubs, so once you have finished reading a hub on say, border collie dogs, in the Related Hubs section on the screen hubs about border collie dogs will appear - if it is one of your tags of course.
Like sameerk said too though, if you want to just attrack traffic and not readers, put useless tags on your hubs such as the most commonly searched words. You may get traffic, but if someone searches for boobs and gets computer tips on how to run windows, don't think that they will buy anything from your page!
Just a tip, though!
Thanks for asking, SF :)