After the first stable release a lot of API changes and new features were introduced. This is the first stable release containing all these improvements. No database upgrades are needed between the first release (4.7.x-1.0) and this one. But a lot of APIs were changed.
So, if you developed your own modules on tagadelic, or created custom (PHP) blocks or pages, then you cannot just install this (4.7.x-2.0) version.
In all other cases, you can upgrade safely, all that might be needed, is a small change in your configuration.
The first stable 4.7 release, released in June 2006. This release is compatible with the first stable release. Use this release when you have made modules, pages, or custom blocks on the first tagadelic release.