I no expert, but I imagine it's not that they're not working as such, but more that unless people use tags in the first place then there won't be any related content for them to find.
It's no big deal really, and not of much use for very common subjects such as "Hornby" or "N gauge" as that'd be easily found in the relevant areas of the forums anyway, but I think they do become useful for quite specific subjects; "Dorman Long", "ICI Billingham", "Skerne Bridge" for example, especially if that content isn't mentioned in the thread title.