routes.rb

map.resources :tags

tag.rb

class Tag < ActiveRecord::Base
  has_permalink :name, :unless => lambda { |tag| tag.name.blank? }

  def to_param
    permalink
  end
end

tags_controller.rb

class TagsController < ApplicationController
  def show
    @tag = Tag.find_by_permalink!(params[:id])
  end
end

view.html.erb

<!-- generic view -->
<%= link_to h(@tag.name), tag_path(@tag) %>