I am careful not to diagnose myself or others and using labels: OCD, ADD, depressive, etc... The reason I am careful about labeling is I don't think the diagnoses are accurate enough.

Any psychologist worth their salt would agree with you: Diagnoses are blunt instruments which we use to describe what are, in reality, complex and unique collections of individual traits and tendencies. There is indeed a risk in "labeling" someone.

But, on the other hand, psychologists often do it anyway. Because the labels also have advantages. The biggest one is: Labels force you to acknowledge the existence of correlations. It is a sad but true fact that some people commit suicide. Other people drink themselves to death. But it's very, very hard to look at your best friend -- or at yourself -- and think this person is about to kill themselves or this person is an alcoholic. Your mind just slides off the subject, like water off a waxed car. You don't want to believe that, so you don't. That's why people always act so surprised. "Who could have predicted that such a successful writer could kill themselves?"

The answer is that sometimes you can't predict it. But one useful way of predicting it is to have a list of warning signs, and to apply (as clinically and scientifically as possible) a special label to anyone who exhibits seven out of ten warning signs. You can't always just listen to your gut, because your gut can be a hopeless optimist -- you force yourself to listen to the label. Then we can take action based on the label -- we give people insurance money to pay for extra therapy, give them access to special drugs, invite them out for coffee instead of beer, encourage them to call (or not to call) their moms, and/or make allowances for their behavior ("Oh, perhaps he's not sending an obvious social signal that he hates my guts! Perhaps he's just having an Asperger's moment!" Is that a glib diagnosis? You bet. But if only I had a dollar for every time that explanation has come in handy...)

Another advantage of labels is that they literally aren't personal. We treat the labelled condition as if it were somehow separate from a person's regular personality -- and that's often not a bug in our labelling system, but a feature! It enables us to distinguish "a guy who sometimes seems nice but is in fact a complete jerk" from "a nice guy, except when he's drunk". We can distinguish "a guy who just doesn't have it together" from "a clinically depressed guy", each of whom requires different treatment. You can try to help the first guy cheer up by encouraging him to change his life, or buying him a pizza, or perhaps just mindlessly telling him to "look on the bright side". You can't do that for the clinically depressed, as Will tells us in no uncertain terms:

"Some people have never dealt with depression, and they can't figure out how it's different from 'being sad.' 'I've been sad! I don't whine about it! I just get over it.' Yes, that's nice. Also, not the same."

As someone who was once depressed, but turned out not to have depression, I tend to think that the label is very useful. Otherwise I might have tried antidepressant treatments before I tried changing my city and my job. Conversely, if I did have depression, but were unwilling to accept that diagnosis, I might spend my time moving randomly from city to city instead of accepting my condition, seeking long-term treatment, and explaining it to my friends.