The Developer Tutorials blog has posted a tutorial showing you how to set up a tag cloud for your site:

Every major website seems to have a tag cloud. Users love tag clouds; they help navigate masses of content quickly and easily. [...] How do we actually build a tag cloud at application level? In this tutorial, I'll take you through putting together a full-blown, calculated web 2.0 tag cloud in PHP.

They start at the end, with an example cloud with some sample tags ("php" being the largest, of course). The code for it is pretty simple - it looks at an array of counts, the number of times the tag is used, and builds the links with the correct font size automatically.