I decided to evaluate Mendeley as a means to "organise" my scientific paper reading and note-taking. A hard disk full of PDFs from forgotten sources, with separate BibTeX files for each paper I write, is messy.
I decided on Mendeley after reading a few reviews. These mostly said good things, and only very few bad things. The desktop application lets you keep the PDFs of your collected papers (and other materials) together, along with notes, tags, and bibliographic information.
You can search on authors, keywords, tags, text, and so on.
You can keep papers in separate directories. Having recently started using Gmail, and got the hang of using tags instead of directories to classify my emails, I was pleased to see tags also supported here. I will be tagging papers not only with the bits of their content of interest to me, but also to tell me which of my own papers have referenced them.
You can export reference information in BibTeX format, for ease of writing papers. (Apparently you can also export in MS-Word formats; but why would you write a scientific paper in anything other than LaTeX?)
So I spent a happy few hours importing my PDFs, and various BibTeX files, merging duplicates, cleaning up the entries, and generally populating my account:
You don't have to have a PDF of every paper: you can store just the bibliographic details, or a URL to where it is stored elsewhere. But if you want to annotate the PDF, you need your own local copy. (There is a separate "notes" field, so you don't need to do this unless you want to annotate in the exact place.) You can sync all this information across multiple computers. (I haven't tried this yet: I've only accessed it from home so far). I can see that free 500MB isn't going to go very far...
I'll try using it for a while, and in anger while writing my next paper, to organise the bibliographic information. So far it looks very useful. It's the kind of thing that will make writing a review paper a lot easier, I suspect.