This seems to be the solution I'm looking for, but I'm still a bit fuzzy.

There's Vocabularies, and Categories, and Freetagging.

...how does it all work together? meaning what's the process to set up a list that displays like:
http://www.odesk.com/console/users/

I need to import a list of suppliers from Excel (as nodes, i guess), then organize them for easy access by buyers.

example:

Construction
electrical (60)
plumbing (75)
concrete (13)
general contractor (44)

I created a content type: Supplier.

Can someone point me to an article or tutorial for easily setting this up?

thanks very much