Nosemonkey, who runs the excellent Eutopia, has a fascinating post on citizen journalism/blogging, inspired by an emailed question on the subject . [A quick bit of background here, if you haven't just gone through and read his long piece. On the day of the July 7 bombings, Nosemonkey ended up liveblogging the event due to conflicting reports on news channels, plus the general sense of confusion that abound. It was, and still is, a great example of how blgging and/or citizen journalism can work and is possibly one of the best posts to emerge from the blogosphere].
What's refreshing is his mixture of cynicism and enthusiasm for blogging. Much as I'm a proponent for all that is Web 2.0, it's always useful to step back and ask: "So, we can do this. What is it actually achieiving?" In the case of social bookmarking especially it's a great way to share stories (an update on cutting a story out of the newspaper and passing it onto a friend), find great content, and, for journalists, track what users believe to be important. Slow burning stories can also be picked up this way.
The best blogs too aren't the ones that claim to be breaking the news or searching for bias, but the ones that have a genuine knowledge and passion for their subject (which is why I think niche sites will be the next big thing, internet wise this year).
And yes, in these cases they often surpass coverage in the traditional media because the blogger is more au fait with the subject than the journalist (assuming the blog isn't already hosted on a major site). Other citizen journalism is more a case of being in the right place at the right time and happening to have a blog.
The concept of citizen journalism from a few years ago is probably near to vanishing. Those blogs that do, on occasions, break news stories, are largely well-known and well-staffed (and often pick up their sources from other blogs or websites, they just don't bother running them through the laywers first). More often well-known bloggers use their site as a shop window and earn their corn thanks to their blog but not because of it.
But blogging is still a great medium, whether you're running a personal blog for three or four friends, covering a niche topic, or attracting a large readership as an expert on the topic. It's a great way of carrying on the conversation beyond the news article (which I still think should be kept as separate from comment as possible), can provide a great lead for a story, or a change to gauge the depth of feeling if you're a journo or PR. It also makes it easier to pick up on errors of poor writing.
I'm still positive about the bloggersphere and Web 2.0 as both a journalism and a publicity medium, and it's great to see the media embracing new trends and experimenting with them, a la Birmingham Post and delicious.
But it still doesn't hurt to be cynical about the Web. For every trend that works, there's half a dozen that the media will jump aboard only for it to be a less than stellar success. In some respects you could say the philosophy of scientific testing and paradigm shifts applies just as much to internet trends as it does to biochemistry and physics. Eventually the problems with citizen journalism or a Web 2.0 trend will collapse under the weight of all the problematic rocks that have been thrown at it.
I'm not quite sure what point or conclusion I'm trying to come to here, other than embrace Web 2.0 but also question why, how, and what you want to achieve at every step of the way.
 I emailed Nosemonkey with a similar request several years ago when I was doing a similar piece for my postgrad course. If I kept the post from the now defunct Coffee and PC, I'll post it up here. It'd be interesting to see if his views have changed since then.