This is an interesting question because to me it highlights one of the great strengths and weaknesses of informal community-driven social networking: the need to have a way to group tweets associated with a specific topic and the inability of the tool (Twitter) to offer direct support of this requirement.

It is ironic that one of the main reasons that Twitter arose as a popular tool in the first place is because of people at conferences (notably SXSW) wanted a tool that would let them stay in touch and coordinate informal meetups and such.

With thousands of users, however, how do you isolate those 'tweets' that are associated with a given event? There's no "keyword" capability, no way for people to register on a central server indicating that they're attending the event.

Instead? Add a simple, short word or abbreviation and then use something like search.twitter.com to find 'em all.

That's what hashtags are. At SXSW this year, for example, I expect we'll see tweets with #sxsw (the inclusion of the "#" is what makes it a hashtag, of course). Search for people who are including that in their tweets and you'll get a running stream of updates from the event.

The big challenge with hashtags is that there's no agreement on what tag to use and in my experience, almost all events generate 2-3 tags or more. For example, when I was at the Consumer Electronics Show, people were using #CES, #CES09 and #CES2009, which makes it hard to keep up while mobile.

There are also some Web-based hashtag services that have popped up in the Twitter ecosystem, notably @hashtags, though I am not always sure what benefit they offer over a more informal usage of the tags.

Hope that helps you out!