Recently, I have been working with Earley & Associates on implementing metadata and taxonomy strategies in SharePoint 2007 with our clients, which gives me good insight into the way Microsoft has chosen to manage taxonomy in the SharePoint platform. Seth Earley, the CEO of the company, publishes a blog on metadata and taxonomy called "Not Otherwise Categorized" where he and our colleagues comment on issues that occur in our work. On December 24, my colleague, Jeff Carr, wrote a blog post entitled "SharePoint 2007 - Implementing and Managing Taxonomy" describing the out of the box functionality that Microsoft delivers with SharePoint Server solution.
Jeff describes how to use MOSS 2007 functionality to implement taxonomy through a combination of site content types, column definitions and custom lists. He provides several good examples of how this is done in the application.
MOSS 2007, however, is not meant to be a taxonomy management tool. SharePoint is designed to be a platform which accepts add-ons to extend its functionality and a number of companies like CodePlex have created extensions. As Jeff says, "Managing your enterprise taxonomy should take place outside of your enterprise systems in a central location using either MS Excel, if fairly simple, or through a more complex solution such as the WordMap Taxonomy Management System."