as crispin mentioned earlier, i'm on a panel dedicated to blogs' impact on news. i write for the austin american-statesman, and in my admittedly biased position I see virtually no impact on news from blogs.
more than anything, it seems blogs have become watchdogs for the media (and corporate america, for that matter). ask dan rather whether he thinks someone was watching over his shoulder. that doesn't change how i do my job, and it really shouldn't change how any other journalist does, either. hell, after jayson blair i'd like to hope reporters are taking their responsibilities a bit more seriously (though i know the writers that don't remain).
to a lesser degree, i see blogs shaping news by shaping consumer demand. the impact of this has been slight at best. people still go to established brands (e.g. NYTimes) and portals that carry established brands (e.g. Yahoo!) for their dose of news.
other than those two purposes, i see blogs having virtually no impact on mainstream news. i read blogs and consider them as any other source: personal; one-sided; and in need of confirmation and context. but that's the beauty of blogs: that they are personal and instantaneous, and confirmation, context and the other side grow organically in blog-world. that growth is far too early on the evolutionary chain to be taken seriously as news.
i'm certain others disagree. tell me why i'm wrong.
also, check out crispin's intial great weblog debate post and the subsequent comments.