Blogs are definitely a great way to promote yourself and your shop, we use ours as the main portal to drive traffic to our shop, try thinking of it as a shop window. We actually get more sales as a result of the blog than we do directly through the shop, lots of custom orders and enquiries.
I've tied it into my facebook account with the 'networked blogs' app which allows people to follow via facebook. The traffic has been fairly continuous and in the run up to x-mas there was an immense amount of interest! Definitely worth doing.
It can be a bit of a chore at times, although as others have said it does keep a check on what you're doing, I for example, have problems getting motivated but knowing that the blog needs updated provides some impetus. Regular updates are important when blogging to keep people coming back (lots of people will subscribe to the feed) and it's useful to remind them that you exist, the number of updates people do varies wildly but I reckon at least one update a week would be the minimum you should aim for. We aim to do posts every couple of days (although it's slipped recently) and whilst we may write a few posts at once we tend to schedule there posting so that there is a couple of days between them ... this can give you a bit of rest-bite without letting the blog slip.
We also feature other crafters and artists, afterall it's a community and it's not all about me me me!