After using them a bit, it seems to me that tags are case sensitive.  In my opinion, they shouldn't be.  Is there really any difference between Historical Fiction and historical fiction?  No. 

I think they would be more useful if they could be case insensitive.

Okay, I take it back.  They are not case sensitive.  If you are typing in a tag, the matching ones come up regardless of case.  Yay!  :-)