In Apple's Macintosh operating systems, labels are a type of seven distinct colored and named parameters of metadata that can be attributed to items (files, folders and disks) in the filesystem.[1] Labels were introduced in Macintosh System 7, released in 1991,[2] and they were an improvement of the ability to colorize items in earlier versions of the Finder.[1] Labels remained a feature of the Macintosh operating system through the end of Mac OS 9 in late 2001, but they were omitted from Mac OS X versions 10.0 to 10.2,[3] before being reintroduced in version 10.3 in 2003,[4] though not without criticism.[5] During the short time period when Mac OS X lacked labels, third-party software replicated the feature.[6][7]
You'll really miss only a handful of discarded Mac OS 9 features, like the Labels menu (for quickly categorizing your files) ...
Mac OS X 10.3 Panther: Arrived in the fall of 2003, Panther integrated Apple-branded cloud storage support for the first time, via iDisk. The Finder added a sidebar, which is a handy place to store familiar folders to this day, and colored labels for files.
XRay can also create Unix symbolic links and assign colored labels to files (an OS 9 feature not included in OS X).
Miss being able to color-code your files like you could in Mac OS 9? Unsanity LLC has released a new OS X 'haxie' called Labels X 1.0. The software enables you to add various color tints to file icons, adding the ability to sort the files by label as well (it adds a 'Label' column to the Finder list view).