Blogs are simply a new term used to describe a web site. It is the combination of the words "web" and "log". By nature it is simply a diary of thoughts, opinions, rants, raves, or other types of editorial content.
Because a blog by nature is a source of information that can be used for research or education, it is not a place for e-commerce transactions, although text based ads that relate to the topics of the blogs, are welcome to be displayed next to the original content.
Since the basic goals of search engines is to be the universal resources for world-wide data and information, blogs get better rankings on search page result since the major content within a blog is not a advertisement to get your immediate business, rather it can be a source of subjective information.
A blog can help web sites by linking to content on other web pages that related to services mentioned in the blog. Another way that a blog can help promote information on a topic is that is can be sindicated directly to a persons email, web site, or custom "My" home pages. This system is called RSS or Real Simple syndication. By adding small code to a web site, a web master or blog publisher can inform subscribers when the content on their web site has been updated. The same syndication process can be used by publishers who are producing a mp3 broadcast, or commonly known as "pod casting".
Publishers most commonly using RSS feeds to inform their subscribers of the newly added content are in the news business. See this example available at CNN's web site.
Bottom line, if you are type of person that can regular add new content in the form of a "how to" then blogging may be for you and may also increase traffic to your own business's web site.
