The new WordPress 2.3 release supports keyword tagging without requiring external plug-ins like Ultimate Tag Warrior or Simple Tagging.
With the new Windows Live Writer 2008, you can easily add keyword tags to WordPress blog posts (see screen capture) though this feature is not enabled by default.
To enable tagging in WLW for WordPress 2.3 blogs, follow the steps below:
2. Add two lines of PHP code (highlighted in green) to the default-filters.php and general-template.php file also available in the wp-includes folder.
3. Goto Windows Live Writer, select the WordPress 2.3 blog and update the settings.
Voila! You will see a new input field that says "Keywords" - type any number of tags here separated by commas and they'll become part of your blog post.
More troubleshooting tips on using WordPress with Windows Live Writer.
Sidenote: I finished upgrading my second blog to WordPress 2.3 yesterday and the entire process completed in less than 15 minutes. The shift to the new WP platform was so simple as if you are just installing a new version of some WordPress plugin. Thanks Matt, your team rocks.