the title attribute tends to be used in things like div's, img's, href's to provide an opportunity to provide a semantic context for the tag, similar to the alt attribute for img tags. In a nutshell, the title element provides info on the current page, the title attribute provides info on individual elements. (correct me if i'm wrong here)

You won't be penalised for using meta tags but, accoridng to current opinion Google no longer takes into account 'keywords' and to a lesser extent 'description' for indexing. Other SE's may do, but they are by no means as crucial as they used to be a few years ago.