The best answer to "What is a Pathtag?" would be to look at their site, www.pathtags.com .
They are small metal tags individual to each cacher, similar to geocoins but more affordable. Not trackable at geocaching.com, but on the site, if the serial number is entered, there either is, or will be soon, a way to see who has your pathtag. Kind of like a "6 degrees of seperation" concept.
I have left a few of mine in caches, just as a way for the finder to say "Hey, I found one of 4leafclover's caches!"
They can be treated as trade items or sig items. There is no need to move it on to another cache. Consider it a "sig card", but in a different form.