How to lower tag space a biped uses?
Because right now it's using HEAPS. Way more than it's supposed to.

find any custom bitmaps that you've made and shrink them down(and maybe retest them in game for the best quality:filesize )

move any custom sounds and sound effects that you don't want accidentally compiled into your maps into a folder that is outside the halo custom edition folder

Tool Pro. It Doesn't lower tag space, but the tag space is ulimited for SP and MP maps.

(Sorry Dennis for mentioning that... Tool.)

One thing you can try to do is consolidate the locations of the referenced tags. Copy all of the biped's tags to tags\characters\(your biped name here), with the appropriate subfolders for bitmaps, shaders, animations, and whatnot. What you don't want to do is, for example, have the model in tags\cmt\characters\mk-ii and the model animations in halo3\characters\spartan. This can save a good amount of tag space.
You may already know this, but maybe not.

The problem with compiling maps with these edited tool's is that they become much more prone to exceptioning.