What I have learnt about corporate blogging is this: Online consumers in 2008 are not impressed simply by a professional looking website or a blog bash. A typical online shopper would do hours of research before making a purchase. Informed consumers want to read about what they are interested in, ask questions, get advice and more. None of this is possible on a simple website. A blog can do all of this.
A blog helps enormously in getting into the top search engine results. Why? Because blogs by their very nature are updated frequently, and search engines prefer fresh content. Search engines prefer sites which have a lot of incoming links. Blogs can get many more of these incoming links than regular websites because people are more likely to link to information (blogs) than commerce (website). Blogs as opposed to websites have a large and growing content. A clearly visible link from the blog to the main website is very effective form of advertising. Remember the best type of advertising is one that isn't perceived by the customer as advertising.