Sridhar Raghunathan, an escalation engineering here on the SharePoint team, has an interesting post about updating taxonomy fields using the SharePoint Lists.asmx web service. I see quite a few posts about taxonomy and using web services, so I thought this would be useful for our audience. You can see the post over at his blog: http://blogs.msdn.com/b/sridhara/archive/2010/07/09/update-taxonomy-field-values-in-a-list-item-through-sharepoint-web-services.aspx