This is a good overview paper with the perspective of someone in library and information science.
Folksonomies – Cooperative Classification and Communication Through Shared Metadata, Adam Mathes, UIUC,December 2004. “This paper examines user-generated metadata as implemented and applied in two web services designed to share and organize digital media to better understand grassroots classification. … Conclusion. A folksonomy represents simultaneously some of the best and worst in the organization of information. Its uncontrolled nature is fundamentally chaotic, suffers from problems of imprecision and ambiguity that well developed controlled vocabularies and name authorities effectively ameliorate. Conversely, systems employing free-form tagging that are encouraging users to organize information in their own ways are supremely responsive to user needs and vocabularies, and involve the users of information actively in the organizational system. Overall, transforming the creation of explicit metadata for resources from an isolated, professional activity into a shared, communicative activity by users is an important development that should be explored and considered for future systems development.”