I sort of understand the basic concept of tags, but i'm not sure how I would apply them and how they could help me.

For example:
I have a Bankruptcy Attorney in San Diego. Thinking in terms of adwords AdGroups, I have an Ad Group for:

Attorney(s): (with 20 keywords including local modifiers like postal codes)

Bankruptcy Attorney: (same idea with the keywords grouping)

Chapter 7 Bankruptcy (ditto)

Chapter 13 Bankruptcy (ditto)

SO, in Rank Tracker I have one project file using the root domain www.myattoneryand city.com. I took all the keywords from the collection of Ad Groups and put them into to one project. I then track the Universal Ranking Of Those Keywords.

How would I use keyword tagging in Rank Tracker and how could it help me? Do they cross reference with the full suite of products? If so, how? Can I use them to across all PowerSuite products and combine the results data into one report?

Well, you can sort by the tags column or by clicking tags and check different groups without the rest, or select which tags to display in your report etc.

You won't be able to use tags between the tools unfortunately or produce cumulative reports, the software does not support that.