Here is some advice that has helped me as I’ve learned a little about categories and tags.
CategoriesThese are handled differently in different platforms. Blogger uses these as labels, and that is what Live Writer submits them under to the post. In general, a category is really a large scale, gross way of dividing your posts into buckets. Think about newspapers, or even the Google home page. Categories are things like News, Sports, Money (newspapers) or New, Images, Video, Web (Google).
This is a separation mechanism. Use categories for very broad sections of your site.
TagsTags are descriptive. They are the adjectives that your posts deal with. These are, to me, an easy way to see at a more granular level, what someone is working on. Note that tags tend to cross categories, so you ought to not bucket tags into categories. You might have posts in multiple categories that have the “hardware” tag.
I would view a tag as the first 2-3 words that you would use to describe the topics in your post. What does your post talk about? Is it about performance? Is it about memory? Is it about a particular feature? You might include those as tags.
What to UseIn general, I like to use categories for large sections of the site, almost like menus as they are in Wordpress. So if you have a blog, but also presentations, the categories allow you to separate those parts of the site.
I prefer tags since I think they are more flexible, and allow a better way of filtering your posts. If you have to pick one, go with tags, but keep in mind that your platform may not support these.
I would advise you to think about this a bit, as changing this over time can be painful, as I’ve learned.