Live filtering of nodes by taxonomy terms? As part of a company website redesign, the designer I've partnered up with has come up with an interesting way of displaying projects and people using taxonomy. We're just trying to figure out how to implement it in Drupal 7:

We have project, and people, and a vocabulary describing specific skills and topics that are common to both.  Each project and person has an associated node containing the relevant terms.

What we would like to have is a master display for each type: people and projects.  Each master display will show all the terms in the vocabulary (this vocabulary will be kept very small), and all projects/people.  However, when a user clicks on one of the terms, the display of relevant nodes will be filtered to show only the nodes containing that term.

We already have the code to handle the live filtering - if these were static HTML pages it would be simple.  But considering that we are using Drupal for the site, it seems rather silly not to take advantage of having a database to query.

I've spent the last few hours scouring the web for anything that will let me accomplish this.  Ideally I need something that will identify/expose the terms associated with the nodes...  It seems Views is the likely answer, but I can't seem to place both the terms and the content type lists in the same view.  This page from a related question here seems to come close, but I am not currently using Panels and I'm still new enough to Drupal that I have no idea how to use the hook referenced.

Hopefully I've explained this clearly enough, but let me know if I haven't. Thanks in advance!
What you're after is known as Faceted Search. You're able to drill down your Views results based on taxonomy terms (or other fields for that matter) as you described.

A good example of Faceted Search can be found within the Commerce Kickstart demo store.

You'll need the Search API module as a basis, and I found a really good tutorial on getting started with Faceted search here: http://vimeo.com/15556855

If you're setting up a site which will get a lot of traffic, you might want to consider using Apache Solr to take some stress off your database when performing search queries.