We've been involved in developing systems that utilize RFID technology for over a decade. There is great promise (and an amazing amount of hype and misinformation) surrounding this often misunderstood technology that many believe will eventually replace bar codes. (They won’t—at least, not in the immediate future.)
The primary advantage of RFID technology is that the reader and the target don't necessarily need to be in an unobstructed line-of-sight. Radio waves bounce around corners and over and under and through things, so an RFID tag doesn't necessarily need to be "seen" by the reader or the person operating it.
RFID in its purest form is an identification technology, not a finding technology. If your primary need is to know, "Exactly where is my stuff, right now?" then an RTLS (Real Time Locating System) might be truly what you require.
There are, as previously alluded to, two main components in an RFID system: a reader and a tag, often called a transponder. The two need to be compatible and there are a number of RFID standards and technologies. Many are proprietary and a growing number are not.
A sampling of RFID tags is shown in the pictures to the right. They can range from the size of a grain of rice to a hockey puck.
RFID Readers are comprised of electronic circuitry and one or more antennae. They can be integrated into a mobile computer, attached to a PC or mobile computer through a cable connection, or function as a fixed-in-place type of reader with a serial or Ethernet interface. In the latter situation, pallets or boxes of RFID-identified goods are typically moved through or past the reader and antennae, which might be situated in a doorway.
I think I have an application requiring the use of RFID.