SVN approach to fixing a tag

Hello all,

I have just released my first wordpress plugin. However I noticed a small error and have fixed it in trunk.

What approach should I take now? Should I create tag 1.0.1 or update tag 1?

(Another little question, I noticed when I downloaded the plugin that it said ‘pluginname-tag#.zip’. Is it going to make all these folders in /plugins/ when I have a new tag?)