Tamahagane is the raw steel made from Japanese iron sand. It's about 1.2% carbon, a bit of silicon, and trace amounts of other impurities. It's pretty crappy by modern steel standards. The biggest difference between tamahagane and modern steels like the 10XX series is that the old steel is very dirty and has no maganese in them.
After forge folding a dozen times, the steel gets much cleaner and more homogenous. Allowing you to make sword blades out of it. At this point the carbon content has dropped to .6 - .7% (a good level for swordmaking). Personally I think SK-7 is pretty close in composition as far as modern steels go. If you buy a made in China shovel, the steel is probably similiar to SK-7.
Tamahagane is not really anything special from a performance point of view. In fact it was so bad that the Japanese had to repeatedly fold it and then laminate with steels of different hardness just to make it a functional sword. The fact that they could make a good sword out of this material is a testament to the ingenuity of Japanese smiths to make lemonade out of a real lemon.
The point is traditional steels are really cool in a historical context. But modern technology has gone a long way since then.
[This message has been edited by tallwingedgoat (edited 08-13-2000).]