Not sure how I feel about this after first read. As a searcher or as a company-hired researcher, I think it makes sense and sounds very helpful. As someone who thinks about how inbound links affect traffic and rankings, I'm worried a bit.
Google has updated its Blog Search algorithm after postponing the update earlier in the month. Barry Schwartz at Search Engine Roundtable quotes Googler Jeremy Hylton who explains:
We have launched a ranking change that reduces the number of results that are returned because of blogroll matches. There are still problems to work out, but this change appears to be a big improvement over our earlier fix. We had originally planned to launch an experiment for link: queries, but decide more recently to release this change first. We are still working on the link: change and expect to have that ready in a few more weeks.

The change can improve the convenience of using Google Blog Search as part of your online reputation management strategy. Anyone with such a strategy in place is probably used to wading through all kinds of mentions of their company that are simply just mentions from blogrolls.
"Well, lets say you are like me and you track who links or mentions you via Google Blog Search," says Schwartz. "If someone has the Search Engine Roundtable in the blogroll, and the do a daily blog post, even if that blog post doesn't mention the Search Engine Roundtable, blog search would show that new blog post as a match. Why? Because it is in the blogroll and Google thinks it is part of the content of the blog post."
The update should eliminate this problem and make tracking your brand through Google Blog Search a little easier. On the other hand, if you really like finding who has you in their blog roll, you might consider the update a loss.
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Good info. There's pro's and
Good info. There's pro's and con's to this update...we'll have to see how it effects blog rankings.