i define identity politics mostly negatively -- ie, i think that most people who use identity to mean something, tend to drastically simplify and over-generalize what it means in a person's (and/pr a people's) life (whatever "it" might be - usually race, class, sex, sexual preference, physical ability, etc). so i get very wary when people talk about identity. also i think people talk about identity (or use identity-coded language) as a way to identify themselves and each other as belonging to a particular group (we are the people who use these words and by doing so indicate that we care about the following things in the correct manner...)
that said, i do think that socially created/understood markers do mean something. i do think that being poor, rich, paraplegic, queer, able-bodied, brown haired, balding (etc) means *some*thing. i just don't think that people know what it means, or have figured out a good way to think about what it means.