Within the STOLAS project, an EC-funded project in the 5th Framework Programme which has recently been concluded, an orthogonal optical labeling scheme using Frequency Shift Keying modulation for the 155 Mbit/s label and intensity modulation for the 10 Gbit/s payload data has been explored. This scheme enables to improve the throughput of packet-switched networks by efficient label processing, and by optical routing of the payload of the packet bursts. The label-swapping is done in intensitydriven wavelength converters, deploying cross-phase modulation in SOAs implemented in an MZI configuration. The packet bursts are switched by means of passive waveguide routers, as a function of their wavelength. The paper addresses the networking aspects of this FSK/IM orthogonal labeling scheme, and discusses the advantages and disadvantages when comparing it with alternative schemes. The key components for implementing an orthogonal labelcontrolled router node are addressed, as well as the node architecture, its economical aspects, and experimental results obtained. The impact of these results on the upgradability and the scalability of a network deploying orthogonal labeling are discussed, and the prospects for application in future high-capacity optical packetswitched networks. A first deployment of this labeling technique may be made in hybrid circuit-packet-switched networks, e.g. for routing of overspill packets.