If you blog smartly, it can help you a lot in the engines.
You need, as with websites, real content that will interest people.
You need to involve others, to comment on your blogs, like a message board needs people. Monologue is boring.
Blogging is a very good vehicle for lots of things, but it takes self discipline to write regularly, and it takes real, interesting articles.
It is perfect for those who are not good at building websites, it’s much simpler and can get you just as far.
I am fairly new to blogging myself, and I went to Vegas for a lecture on blogs. I blogged about it here: http://www.gamesandcasino.com/casino-affiliates/news.php
This short blog is a good example of what works to attract comments and what doesn’t. The two entries that aroused interest are personal opinions.
Of course you have to know what you are talking about, but there is lots of room to talk about personal gambling experiences that will arouse interest.
I am not at all surprised at the big shake out in blogs. Talking about what you had for dinner last night is just boring to all but yourself. Creating an interesting and dynamic blog takes a lot more work than most people are willing to invest.