How to create a list of similar nodes in Drupal 7/Views 3
For those upvoting and favoriting, I've got the answer here: https://stackoverflow.com/questions/10454507/creating-list-of-similar-nodes-in-drupal-7-views-3

It boils down to:


Create a block view
Add Contextual filter -> Content: Nid -> Provide default value -> Content ID from URL
Add Relationship -> Content: Taxonomy terms on node -> specify the appropriate vocabulary
Add Relationship -> Taxonomy term: Content using vocabulary as specified
above -> Check off Require this relationship
Turn on Views aggregation
Assuming you are listing title only, edit the title field to use the Relationship you set up in #4 above.
Add new sort criteria of Content: Nid. In aggregation settings, select Count. Use relationship from #4 and sort descending
Add Contextual filter -> Content: Nid -> Use relationship from #4 -> Provide default value - Content ID from URL -> Scroll down and expand "More" then check "Exclude" to remove current node from the view.