While one sector of the PR community thinks corporate blogs are good because they get the corporate name out there, another sector looks at them with horror, worried that it's a perfect vehicle for getting "off message." In short, there's a huge debate because blogs are being analyzed in terms of PR -- public relations -- and that's skewing the arguments.
In my view, blogs don't fall under the realm of Public Relations -- they fall into the category of Aficiaonado Relations. Let's step back a bit here. Public Relations as a discipline arrived when mass marketing and consumption arrived. Back in the days when everyone bought from their neighbors (pre-Industrial Revolution), everyone knew who made quality products and who made shoddy products; who was a joy to deal with, and who was a pain.
When mass marketing took off in the early 1900s, people relied less on their their own experiences, and leaned more on brand identity and communications to make purchase decisions. Public Relations was founded to control the messaging to the public, by popularizing brands and smoothing over chinks in the marketing armor -- e.g., fourth or fifth in the market became, "One of the leading...".
This level of PR command and control, while permissible within the large public market, doesn't work among aficionados. They already know company A is fourth or fifth, and declining rapidly. PR folks claiming otherwise only leads to snickers among those in the know, rather than unquestioning acceptance.
Blogs, unlike press releases and Web sites, are the vehicles of experts and enthusiasts, who write about subjects they are passionate about and are willing to spend time reading what others are thinking.
Therefore, blogs are not really a PR vehicle; PR, in the larger sense, assumes its audience is naive. Blogs are a different animal -- they are a way for enthusiasts to connect and communicate. This is why ghost-written blogs and corporate edicts that "you can only say nice things" are such a disaster in the blogosphere. While the public may not have the wherewithal to spot such "spinning," experts can.
Therefore, I predict that leading edge PR firms will use blogs well -- setting up guidelines for their clients, helping pick appropriate bloggers, and then letting their clients do their own thing. It's the PR firms with the ham-fisted approach that will try to overcontrol and then watch blogs do nothing, or worse, cause damage to their clients.