Much like the excerpt, a tag cloud is a tool for readers, not authors, as it helps them navigate all of your posts to find those that are most appropriate or appealing.
Also much like excerpts, myDDO has not yet implemented a way to search for posts by tag (or perhaps I have not yet stumbled across it) so one must apply tags in the faith that they will eventually be useful. On the plus side, the tag cloud itself is somewhat interesting to examine as it provides impartial feedback showing where you are placing the emphasis of your blog.
You may assgn as many tags as is appropriate, adding new ones as needed. Like Categories, some care should be taken to re-use existing tags before creating new ones.