() mentioned you were questioning whether or not to blog. FWIW, this is something I've mulled over because of the question of how it impacts my writing and whether it ends up taking up time that would be better be spent writing.
And the answer that I've come to is that it's a necessary part of the business of being a writer, much like the time spent researching markets or arranging convention trips. Like any activity, I could devote too much time to it, so the trick is figuring out how much time is reasonable and watching myself to make sure I don't get too carried away with it, because like most writers, I will gladly, gleefully procrastinate if I allow myself to. Blowing off a little of that procrastinatory energy on LJ is, to my mind, a good thing.
People use blogs for several things. One is building an online presence. You can have a great website but it's not going to do you as much good if it's stagnant and neglected -- but if it's getting updated every few days, people will be hitting it more often. You don't need to track rejections on it - I certainly don't report every one faithfully, but I may mention nice ones or ones from markets where I know other people have stories, such as the pirate anthologies. Tracking victories or attempts, though, is a good idea. I find one easy way to generate content is posting a teaser from what I'm writing - it's fun to look back over the day's work and find a paragraph or two that are particularly grabby or lyrical to post, and if you are posting only a snippet, you're good as far as submitting the piece to markets goes. In fact, it helps build an audience for the story ahead of time.
People also use blogs for acquiring info. Here's a good example of why I read blogs: Jason Stoddard is currently publishing a series of marketing advice posts on his blog. The most recent is at http://xcentric.com/2007/03/07/new-marketing-101-for-science-fiction-publications-and-writers-session-2/ and it's full of good stuff. He talks more eloquently than I about the business side of being a writer and how you do need to be willing to put thought and effort into marketing yourself. I found it through Sean Wallace's blog. I find market info, contest stuff, feedback and all sorts of great stuff through being willing to spend some of my allotted blog time on reading and commenting other people's posts.
Finally, blogs let you network. You can interact with people and get to be friends with folks who you are most probably going to see and interact with at cons for the rest of your career. Usually I come home from a con and add a handful of new folks to my livejournal friends list - and I can't begin to say what a boon that LJ friends list is as far as gathering up a bunch of blogs that I am actively interested in. And I read and comment, and generally have a really enjoyable time. I think part of what makes the LJ community so great is a willingness - even an eagerness - to celebrate each other's victories, to cheer each other on, and that such a willingness to celebrate other people is an essential part of a LJ presence.
It's not hard to generate content, I would argue. You don't have to reveal deeply personal things -- there's plenty of engaging possibilities: politics, pop culture in all its myriad aspects, what you're reading/watching/playing/listening to, to name just a few. I'm even sticking an edited version of this up on my blog because this is something that people have been talking about a lot lately, and I want to open it up and hear what other people have to say.
Now, are blogs mandatory? Certainly not. But if you don't want to do one, I would argue that you need to find another way to meet the three marketing needs that a blog answers: building an online presence, acquiring news and information, and networking.