[DrDubzz]

Cellaring can mean either purposeful aging, or just storing

However it generally means intentional aging of either tinned tobacco, or jarring (mason jars usually) bulk tobaccos.

Pipe tobacco, much like cigars, generally improves with age. The benefit gained is proportional to the (natural) sugar content of the tobacco. Thus making Virginia tobacco the best candidate for long term aging. However, English blends with latakia and orientals improve as well. The changes seen with aging are, again, similar to that with cigars.

Flavors meld together more completely, harshness smooths, sometimes strength increases. It really just depends. The main difference in again pipe baccy and cigars is how. By that I mean that cigars are not aged in air-tight environments. Air-restricted, but not air tight. Pipe tobacco won't age/mature fully unless it is in a sealed environment such as a sealed tin or seal mason jar.

Ideal conditions, as above, are air-tight sealed conditions. The tobacco should maintain its moisture well enough that it doesn't require any external humidification like cigars do. Although if you cellar dried out tobacco you'll just end up with old dried out tobacco.