auto tagging

This is an interesting module but couldn't understand the point of it.

Point of this module is to create term when node is created. So users without permissions to manage Taxonomy will be also able to create terms.
Example use: Node type 'album' will create term in Vocabulary 'album hierarchy'. So photos and videos can be assigned under that term. On 'album' node we can use view to show all 'album', 'photo' and 'video' nodes which belong to specific album term (which is connected through NAT-ng module).

While adding automatic terms to vocabulary, can't it auto tag the node?

and instead of using all words in the title, why not to create seperate terms form these title words?

This seems like functionality for different module. Quick search shows Taxonomy Autotagger (http://drupal.org/project/autotag) which seems to do same.

Yeah. For me, NAT-ng provides a SIMPLE and intuitive way for a user to manage taxonomy.
It also provides a way to attach various fields to a taxonomy term by associating a node to each taxonomy term. There are other ways and modules to do that. NAt-ng just does it in a nice, simple, & intuitive way, IMO.

Edit: sorry, created new issue #755830.