GNU tar creates archives in various formats and recent versions create archives in the POSIX-2001 format. Unfortunately, while this format is the most flexible and is standardised, it is not yet supported by most of the installations out there. When you distribute archives in this format, users using older versions of tar (even GNU tar before version 1.14), will see "weird" folders like PaxHeaders.1640 extracted along with the ordinary contents of the archive as well as get error messages like "unknown file type `x'".
I was bitten by this problem when I tried to extract an archive created on my home PC using GNU tar 1.15.1 on Linux on different systems elsewhere. It seems that the "v7" format is the most portable at the moment, though it has severe problems with long file names and large files. My project does not have long file names or huge files, so I can use this format for the time being to avoid these problems. The long-term solution however is to encourage everyone to use a tar programme that can handle the far better POSIX-2001 format.