When Blizzard introduced the 'Real ID' cross-game friend system for Battle.net, it bafflingly required users to share their real name with everyone on their friends list. That's now being addressed with the introduction of BattleTags, a unified nickname you get to choose, so you needn't necessarily share your meatspace identity with someone simply because you play video games together.
Like the Real ID system, BattleTags will let players chat, play and stay connected across Blizzard's games, except you pick a nickname. Names are not unique, but they do combine with a four-digit ID code so people won't mistakenly add the wrong Sylvanas69, Kerrigan69, or DeckardCain69.
BattleTags are now getting their first trial in the Diablo III closed beta test, initially only supporting friends lists. BattleTags will eventually be supported by "all current and future Blizzard games," but there's no word on when they'll be rolled out to StarCraft 2 and World of Warcraft.
All Battle.net members can register a BattleTag now, though do be warned that they cannot be changed.
Real ID was widely slated for the privacy issues it raises, and Blizzard was forced to kill a bewildering plan to show real names on the WoW forums. Blizzard did eventually add opt-out options, letting players skip Real ID entirely or better control who can find them.
Real IDs aren't being phased out, though, and the system will continue alongside BattleTags.