The initial thought is to help people know each other's names. But the first point of introduction is either informal greetings to those you know, or a raised hand to shake hands and pronounce names. Even if name tags are sitting prominently on each other's person.
That's how you end up with name tags later in the night, after these formalities have been whisked away by failing adhesive or glasses of wine, affixed to the back of other guests. I suppose at one point this sort of exercise in name tags made sense, but I find it even harder in the world of social networking to reconcile. Although I still like the idea of the business card, it falls in the same category. You might imagine that my future parties will have less of these anachronisms and more of the classic host duties, which is introducing people at parties to talk and form connections that name tags allow us to hide behind. Novel concept, eh?