What is the purpose of the hash tag # in Twitter?

[jwbseven]

I'm trying to understand because if you want to search something you can just simply put in the term and find everything related - so how does the hash tag make a difference?

[Chad]

1. People use the hashtag symbol # before relevant keywords (no spaces) in their Tweet to categorize those Tweets and help them show more easily in Twitter Search.
2. Clicking on a hashtagged word in any message shows you all other Tweets in that category.
3. Hashtags can occur anywhere in the Tweet – at the beginning, middle, or end.
4. Hashtagged words that become very popular are often Trending Topics.