Yes, it's an alternative way of reading blogs (and news, and weather, and whatever), but it's also a centralized one with some advantages. I now have 90 feeds - there's no way I could keep up with that much without an RSS reader.
1) It only shows me the new stuff.
2) It allows me to set up folders so I can break new content to read into logical chunks that I can deal with when I have time.
In short, it lets me read 90 feeds daily without hitting each one separately, and does the work of trying to figure out what I've already read. The rest of the potential remains to be seen.
There are RSS readers for desktops, but I use a web-based one (bloglines.com) so I can maintain state between home and work. Registration is free. Bloglines also recently added some new features, including easily maintaining your own blog made up of interesting stuff (which people can also subscribe to using RSS).
As far as good feeds, you can check out my feeds at http://www.bloglines.com/public/fields, and bloglines also has a directory of popular feeds once you make an account. If you have a bloglines account and you're browsing my feeds, you can subscribe to them directly from there. Web searches for "whatever + rss" seem to work pretty well. Many pages also have an orange "XML" or "Syndication" icon with a link to the feed.