Sure, it's just another URL-shrinking site, but there is some usefulness to be found here -- Blizzard forum URLs, many guild websites, and talent builds on Wowhead and elsewhere all have gigantic URLs, and shrinking them down to a memorable phrase could be helpful. Not to mention that Tim tells us that they want to "heavily moderate" the service -- gold farmers, keystroke loggers, and phishing sites are supposed to be kicked right out of the system, so if you see a TagWoW link on the forums, you will hopefully always be able follow it without worrying about compromising your security.
Like I said, there's just enough functionality added here that it could end up being something big. Currently, there's apparently only a few URLs saved in the system (the site only went live last week), but you can probably expect things to pick up with our post here -- and hopefully we won't burn the site down. With the right URL submissions and, as Tim promises, some serious moderation to make everything trustworthy, TagWoW could be a nice service.
EDIT: Be advised that as of this writing one of the links on the front page of TagWoW leads to an adult site though it doesn't say so in the link description. Click the links on TagWoW at your own risk.