Blogging will, of course, never replace the mainstream media. Most blogs discuss info that's reported in the mainstream media. What it adds is a meta watch dog element (a watch dog watching the watch dog). Blogs remind the mainstream media that they need to defend their sources and their reporting, and that everything is easily fact-checked. In an efficient market place of ideas, articles that are well-reported, interesting and timely will stand out regardless. So newspapers and TV stations should produce more of those, and stop fretting that many people with websites are fact-checking their articles. So what?
Once stories are originated away from the Old Media, the Old Media -- already rotted on the inside due to their years of setting the agenda with no transparency -- will collapse. Viva la revolucion!