How Does a Blog Help With SEO?
Let me begin by saying you should never blog just for the search engines. What I mean is, if you're going to start a blog, you should do for business and communication reasons, not for SEO reasons.
With that said ... yes, blogs do help with search engine visibility!
A blog, or web log, is an online journal you can post content to quickly and easily. While blogs used to be primarily kept by individuals (as online diaries), they have come into their own as business and marketing tools.
Basically, a blog is a website with content arranged in chronological order. Once set up, a blog is easy to publish as you don't need any HTML / web coding skills. Blogs have a fill-in-the-blank interface where you enter your content. Then you click a "Publish" button and presto, your new content is automatically converted into HTML code and published to a viewable page — in a matter of seconds.
Here's where search engine optimization comes into play. By default, blogs do many things well that can help them earn search engine ranking. In many cases, blogs can achieve solid ranking faster than regular websites. A blog is easier to publish than a regular website, so you can post content to it more often. Search engines like websites with frequently updated content.
Popular blog hosts include Blogger, TypePad and WordPress. Depending on the blog host / software you use, you may be given the option to publish the blog to your existing web host domain (where your website resides) or to the blog host's domain.
Option 1: Publish to your domain. The blog address might be: www.yoursite.com/blog
Option 2: Publish to blog host's domain. Address might be: www.blogspot.com/yourblog
In both cases, you get access to the blog's easy-to-use publishing tools. But with the first option, all the search engine benefits of maintaining the blog will apply to your website as well, because you're publishing the blog to your own web domain.
In other words, the web pages and files that result from your publishing efforts will reside on your web host. In Option 2, the blog itself might enjoy search engine visibility, but that visibility will not apply to your web domain because the blog is not being published there.
In Plain English:
All the SEO tactics you've learned on this website can also be applied to a blog. To get the most SEO benefit, publish the blog under your current web domain (www.yoursite.com/blog) as opposed to the blog company's domain (www.blogspot.com).
More Blogging Articles (off site)
Blogging Experiment: I'm currently conducting an SEO experiment to see how quickly a blog can climb the search engine ranks for a competitive topic. My weight-loss surgery blog has been designed as a "lean, mean content machine." I post content to this blog on a near daily basis, and I have established a decent linking profile through the use of directories. I am tracking results for such phrases as bariatric surgery and lap band surgery. After a few months, I will publish a case study through my SEO blog.
Related question: How do search engines rank websites?