Rabbi Shimon ben Gamaliel said: there were no days as good as the fifteenth of Av and Yom Kippur, when the girls of Jerusalem used to go out in white garments borrowed so as not to embarrass those who couldn't afford them ; and the girls of Jerusalem would go out dancing in the vineyards, and what would they say? "Young man! Lift up your eyes and see who you will choose; but don't look at physical beauty look at the family!"
This is clearly a problematic passage, as the image of Yom Kippur as some kind of romantic field day doesn't exactly square with our general view of this holy day. With respect to the fifteenth of Av, there is no conflict, just the question of what actually happened and why. As far as I know we have no other sources about this custom, if it really was a custom.
However, it is interesting how secular Israel culture has latched on to this obscure text. The fifteenth of Av (known by its abbreviation, "Tu Be'av" just like Tu Beshvat) has become sort of an Israeli Valentine's Day, only more so. The timing is perfect for festivals for young people, as the date generally falls in the last weeks of summer vacation when everyone is ripe for being entertained and diverted. And so, at venues all over the country, all the popular musicians perform in large outdoor concerts, and there is dancing in the grass. Meanwhile, those who are a little older and more serious are busy attending lectures and workshops on "relationships" etc.
I wonder why this little Talmudic reference has become such a big deal especially in a culture that does not evince a lot of interest in the Talmud and its teachings. Is it that all cultures need a day or a period when romance, if not sexuality, breaks briefly out of its shackles of taboo? If one wanted to be critical of the Tu Be'av phenomenon, one would still have to admit that if we are going to have such a day, better it should be Tu Be'av than Saint Valentine's Day! It may be frivolous or even licentious, but at least it's ours. On the other hand, it is hard to avoid the suspicion that what is really going on here is less an expression of an organic cultural need and more an expression of capitalist exploitation and clever marketing (a la mother's day and father's day and secretary's day and boss' day etc.) by the purveyors of flowers, music, candy, etc.
It is interesting to contrast the public consciousness of Tu Be'av with the fast day of the ninth of Av that occurs just a few days earlier. This is, traditionally, second only to Yom Kippur in terms of its severity as a fast. It is a major event in orthodox communities (and in North American Jewish summer camps, as it is the only special day that occurs during the summer, so we always milk it for all it's worth! It's probably a good thing that the fifteenth of Av has escaped the notice Jewish campers; I suspect that the one thing that camp directors don't need is a Talmudically sanctioned love festival at the end of the summer). Unlike the other holidays, Israel secular society almost completely ignores the ninth of Av, and many people don't even know that it is occurring. It is observed in synagogue and at the Western Wall; and while 30 years ago all kinds of Israelis made a pilgrimage to the Wall that night, now it is almost entirely an orthodox monopoly.
Two days a week apart, two worldviews, one tradition.