Drew Conway, a poli sci grad student at NYU, has a post up encouraging graduate students to blog (h/t Monkey Cage). I basically agree with all his points, particularly the first few. That is, grad students really do have something to say, and blogging is a nice way of developing your ability to describe research in a concise and accessible way and to promote yourself.
In particular, I think this sort of writing exercise can be very useful in the first few years of grad school. As I recall, my writing became considerably more technical and obscure during my first two years of school as I learned lots of new statistical techniques and jargon. I think (or at least I hope) that my writing has moved back toward the accessible since that time, and at least part of what has motivated me to do this is my desire to reach an audience outside academia. Blogging can probably help students retain their accessibility as writers even as they learn lots of obscure material.
Now, I should mention that if there are risks to academics who blog (a point of some debate), those risks are an order of magnitude greater for graduate students. If you make very public claims that turn out to be wrong, if you insult powerful people, if you misrepresent yourself, if you use false data, etc., that could damage you at a time when you're extremely vulnerable. Hiring committees can afford to be very selective when there are 150 applications for one job; they don't need too many excuses to toss a file aside. But, while I would urge caution, I think there are great rewards for those who blog, and I also think it does our discipline a great service.