I was doing some WordPress work last week and wanted to make related posts based on tags, so this little snippet of code came in handy:

Place this inside your loop on your single page, and it will use the post’s tags to find related posts to display:

<?php
    $taxs = wp_get_post_tags( $post->ID );
    if ( $taxs ) {
        $tax_ids = array();
        foreach( $taxs as $individual_tax ) $tax_ids[] = $individual_tax->term_id;
        $args = array(
            'tag__in'               => $tax_ids,
            'post__not_in'          => array( $post->ID ),
            'showposts'             => 5,
            'ignore_sticky_posts'   => 1
        );
        $my_query = new wp_query( $args );
        if( $my_query->have_posts() ) {
            echo '<h3>Theoretically Related Posts</h3>';
            echo '<ul>';
            while ( $my_query->have_posts() ) :
                $my_query->the_post();
?>
                <li><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><?php the_title(); ?></a></li>
<?php
            endwhile;
            echo '</ul>';
        }
        wp_reset_query();
    }
?>