Doesn't sound too exciting when you put it like that, but it is quite an interesting idea. Basically, with everyone seeming to have a smart phone these days (or the very least a phone capable of browsing the Internet) there seems to be a lot of interest in making it easier for people to enter your web address (hence the rather exponential number of short URLs floating about atm). Microsoft's Tag basically allows you to take a photo of the rather colourful 'barcode' and the Tag app will translate it into a web url or email address etc...
They certainly are the first to try this approach, but their barcodes are easily created, colourful and customisable!
For example, the three images below are all Tags for this website. The first is Microsoft's default barcode using triangles, the second is the basic barcode showing the bare minimum you need to be able use the Tag and the last one is a quick and dirty example of a customised barcode... it looks like a load of doodles but still works!
The easiest thing is to try for yourself... for the main website visit http://www.microsoft.com/tag/ and to get the application for your phone, go to http://gettag.mobi
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