There is a big difference between tags and categories in Blogs. If you know the big difference between the two, you could build a better structure for you blog.Categories are high level buckets which you should be able to chunk up by small exclusive sets for your blog. It could also be a part of URL
Two types of tags are the Internal tags and External tags. The first are for finer slicing and hopping within your category while the second like Technorati and del.icio.us are for showing content in relevance.
Link: J.D. Meier's Blog : Tags vs. Categories
