Alas, I may still, but Jane Ciabattari has a long piece at Poets & Writers that examines the state of book reviewing from many vantage points and mentions the role of literary blogs in how the landscape has changed.
I need to re-read it a few more times before I'll have cogent thoughts (and before I'll know if I should truly have published my piece first!) but I invite you to read it as well so we can discuss together.
To whet your whistle:
"The best of the feisty group of literary bloggers who began pushing the boundaries of traditional book commentary a decade ago have been woven into the mainstream, and their iconoclastic styles have freshened the form. This ongoing transformation has challenged our collective creativity and pushed all manner of innovation. This period will be seen as a benchmark in book culture. But it’s not the end of the book review."
Go. Sally forth. Read and report back.