Every time a post is created we have the option put on a few keywords (tags) that sort of reflect its content. These keywords form the Tag Cloud.
All the tags used are shown here, the relative size of each word indicating the number of times that particular tag has been used all together. So, some tags will be bigger because they are used more often.
If you're looking for a particular item, and know roughly what it was about, just click the tag for a list of all the posts using it. Simples.