Welcome to the forums. Tagging in Windows Live Photo Gallery is the best I've seen. There are multiple ways to tag, including People Tags, and descriptive tags like you mentioned. Windows Live Photo Gallery can be used in a network environment in that it can access photos stored on a network drive. However, I have not attempted to run the executable over the network.
While there is a database that Windows Live Photo Gallery uses for caching and other features, the tags themselves are stored in the individual photos. The catalog is for the most part built on the fly based on the photos and not a particular database. So yes, multiple users can access the "catalog" and not fear only one user having edit access.