Microsoft Outlook categories that start with "#" are tags in Remember The Milk.

To distinguish tags from lists (which also sync as categories), each tag name is pre-fixed with a "#" in Microsoft Outlook i.e., the tag errand from Remember The Milk will show as the category #errand in Microsoft Outlook.

To create a new tag within Microsoft Outlook, simply create a new category and start the name with a "#". When you sync with MilkSync, this category name will automatically become a tag in Remember The Milk.