I find that taunting the aliens in a dogfight sometimes reveals the species piloting the hostile craft if you haven't got close enough to do a scan, which is sometimes useful in the opening stages of the dogfight.

Does it have any other effect (eg provoking an opponent into recklessness or raising the morale of your wingmates) or is it just there to add a touch of humour to the game?

To be honest, I never noticed any difference but then again I didn't play it that much.

There are a few games that have taunting in - like Unreal Tournament, but I've never seen reactions to it.

I suppose you would have to save a game and try it both ways.

As far as I'm aware, it makes them more likely to taunt you back.

I also didn't know this. Good idea! I shall reserve this little trick for later