Tags are simple toggles you can use to help you sort through and cull photos. A photo is either tagged or untagged. Tag a photo by checking the box on the image thumbnail in the contact sheet or in the preview window. You can tag or untag multiple selected photos through the Image menu. You can also use the keyboard shortcut "t" to toggle tag/untag a single image or ⌘+ and ⌘- (Control - or +) to either add or subtract a tag from multiple photos.
Use the View menu to filter your view of the contact sheet. Your choices are All, Tagged, and Untagged.
Use the Edit menu to select all tagged images.