Most people are familiar with tags in audio files (e.g. mp3). These tags are stored in the audio file and contain metadata describing the music title. An mp3 file can contain tags like title, artist, album etc.
Jpeg files can contain similar tags. Most digital cameras store a lot of metadata into the EXIF tags. These tags contain technical information e.g. the camera type, exposure time, settings of the camera, date, time and so on.
Other common tags are the IPTC tags that describe the content of the picture. You can store a title, the location (city, state and country), a copyright note with e-mail-address and a number of keywords for each photo. Many different archiving programs use this data to provide better searching and browsing. Online photo databases (like flickr) use this data to describe the picture.
If you know the exact position where a picture is taken you can store the latitude and longitude (from a GPS device) in special tags and place this photo on maps or satellite images.