Well sure, it could help. But it's only likely to help if you have original, creative, and authoritative content. If you put up a blog and just leave it, without post, it won't help at all.

Keep it updated with new content on a regular basis and sure, it could help.

That's not to say for sure it will, but it could help.

A blog can increase site popularity if there are quality and unique content in it, if keywords are well targeted in a blog its helps in getting extra backlinks. It could be a link building strategy if you include the link of your main site directly to it.

Post your blog on a regular basis so as visitors will always get something new to read. Name your blog with the same name as your business so that visitors can see the connection. Avoid overselling, as it will dramatically reduce the number of your blog readers.

A blog is an excellent tool for additional web site traffic, get new newsletter subscribers and sell more products. Use your blog to introduce potential customers to your business.

Good blog posts can be submitted to digg and the other social media and get you traffic that way... as well as links etc.

I've set up a few blogs for clients. It doesn't typically have the instantaneous effect they want, but if you host it through blogger or wordpress it does get indexed pretty quickly, and can be one way for web browsers to stumble upon you. But yeah, fresh content is essential.

Blogging for blogging sake will not help your business or your rankings, fresh content is only useful if it relates to your subject and will benefit a searcher.

By blogging you are creating new pages to your site, each page is a potential doorway to your business and in particular your site. If the content is not useful or relevant to the rest of the site the visitor is unlikely to carry on looking around the site. To put it another way if someone searches for teddy bears, and finds an article about them on your credit card site you are unlikely to see them going and applying for a credit card.

If you feel you or maybe a colleague could produce enough regular content then a blog could be a good way to go. Blogging is human focused its very much the in thing customer service wise and in many companies has replaced their news section.

SEO wise, do not go for hosted services, rather choose self hosted software such as Wordpress, Drupal etc there is no point garnering links to a site which is not your own. That said there maybe times when going self hosted could be advantageous such as for reputation management where you are looking for more then 1 or 2 sites within the SERPs for certain keywords.

Ultimately blogging is time consuming and depending on your niche not appropriate unless you are also looking towards a social media strategy. If you have a small site and don't feel you could manage a blog, focus your efforts on those one or two updates a month try to keep adding fresh content when you can, and make sure your navigation system grows to accommodate and help search engines find the content quickly.

Another benefit of adding a blog is that you will have an rss feed which can be submitted to rss directories and pinged at pingomatic.

Andrew

To be fair you can do this for any site and you do not need an RSS feed to use ping-o-matic though many of the services it pings will expect to see an RSS feed. However adding an RSS to any site is pretty easy to do with numerous scripts to do this automatically or external services. It might not be as neat as blog solution but it works.

Another option might be to use a blogging platform but without using it as a blog, many sites are turning to CMS and Wordpress and other blogging platforms are nothing more then specialist CMS after all.

In general, IMO, backlinks and stuff like that can only help you to a very limited extent. Now, on the other hand, improved content of various kinds will provide you a steady readership.

So if and only if you have a way to add new content to your site with the blog, if it will make the reading experience better, add it.

Don't engage in feeping creatureitis.

I am totally agreed with tnash. Regular blogging on the niche you are targetting will definitly improve your SEO Rank.

A well organized Blog will attract readership, comments, RSS Subscribers, Trackbacks many more. Self hosted blog is as good as hosted blog.

It is always important to choose a perfect blogging platform which is already concerned about major SEO Factors. I will suggest Wordpress. It is simple and very powerful. Some of the major SEO Factors it covers include permalink (SEO Friendly URL), Ping, Sitemap etc. It is also very easy to integrate it with your existing site. So wish you best of luck blogging.