Recently, Northumbria Police had a stand at Newcastle Central Station giving away free RFID tags for your bike. The idea is that you register with the Immobitag website and enter the ID number printed on the tag. You then push the tag down the seat tube where it can't be removed, at least not easily.
Then, if the bike is stolen and recovered by the police, they scan the bike for the tag and contact you to reunite you with your beloved machine. Notice that there are two conditions that have to be met before the tag becomes useful, although the police claim it also works as a deterrent if you place stickers on the bike to warn would-be thieves that it's tagged.
At first I thought it's a pretty good idea, and the police officer I spoke to seemed keen to install it on my bike there and then. I declined that but took the tag anyway because I thought about installing it on a different bike. However, after thinking about it during my cycle home, I decided not to install it.
Firstly, I don't think it's an effective deterrent if you warn theives about the tag with stickers. Once stolen, I expect a hammer, an implement long enough to go down the seat tube and some brute force would allow thieves to remove the tag quite easily.
Secondly, adding an RFID tag to your bike means that your bike is registered on a database whether it is stolen or not. Of course, I don't expect an Orwellian situation where there are RFID scanners on every street corner tracking your every move, however I do believe that giving your bike an identity compromises your freedom and privacy as a cyclist, just a little.
There's a better solution to the bike theft problem, one that doesn't compromise your freedom, and it's to lock your bike more securely in the first place. Most cases of bike theft result because the bike isn't locked at all, is locked the wrong way or is locked with a poor quality lock that can be cut through easily.
Read Sheldon Brown's lock strategy page for information on how to lock your bike securely.