On my site we are considering replacing our category structure with cross-cutting tags. To make this work, we need to be able to let users see and set the tags they are watching, as they can now with categories. This will also help admins to make sure people are getting everything they need to be getting.
So the suggestion is to add a section to the user preferences page that replicates the category notification settings, but for tags. Start typing a tag in “watching” and it autocompletes. Select the X next to a listed tag and it is removed.
Perhaps an MVP alternative to this would be to add simple UI to /tags to allow users to show tags filtered by their notification level.