I want to spend a little more time on the subject of tagging. A tag is a description of what is in the photo. What makes tags useful is that if you know what is in the photo, it is easier to search a huge collection for photos that match that tag.
If you are looking for Christmas photos with Grandma AND Jane in them, you'll find them much easier if they are tagged.
So now you understand why tagging can be so useful. But with thousands of photos, won't it be too much work to tag them all?
Windows Live Photo Gallery makes this process easy - and maybe even fun.

In the above example, I selected all of the photos in my Thanksgiving 2003 Cabin folder. And started tagging! I added Thanksgiving, and Cabin to all of them at once. Then I can visually look for all of the photos with my wife in them, and add a tag Lisa. Then repeat that process for each searchable item.
To find untagged photos, select the Tag "Not Tagged" from the tree view on the left. Then work through them until they're all tagged. Couldn't be simpler!
One thing I tried to do was drag a tag to a photo. It seems so intutive. In the real world, you place tags on objects. And these tags are shaped like tag icons. But as of this version, you can only do this in the reverse way (which is still cool and helpful). So, to review: you drag photos onto the tags on the left, not the other way around. Let's hope this changes soon (bi-directional, please).
Next: Locate and View Photos and Videos