Wow, great idea! I will add a sample Tag tomorrow if I have time. I will probably alter the facebook login system soon as well. Thanks for the pointers!
I have it set up to create an account with your facebook credentials so you may also login with your email address. That is why you need to supply a password, because you may login more than one way.
Not necessarily high sensitivity, but if someone would happen to get into your account, they may delete all of your Tags.
The email confirmation is important because the entire service runs on email - when someone finds your Tagged item, TaggedBack sends a email to the owner. If that email is incorrect, they will never be notified. I am unsure how else to do it.
According to my analytics, very few people go to the registration page, but when they do, very few leave without registering.
Thanks for the questions and suggestions, they are much appreciated!