I was speaking to a group of women entrepreneurs recently and one asked, "Why can't I just use a normal website for this?". Good question.
Conversation
The most important aspect of blogging is that your blog is part of a conversation. A website is a monologue - you talking to your readers. Your blog however, allows your readers to easy talk back to you via comments. The blogging software provides this commenting facility as well as a way for you to manage the comments and institute control over comments.
Easy to Use
The blogging software makes it easy to continually add content and updates (Which gives people a reason to keep coming back). You add an article to your blog by simply entering the text into an online form. Sure, you could update your website just as frequently, but then you have to deal with HTML or have a really cooperative webmaster.
RSS
I talk more about RSS here, but the important thing is that almost all of your regular readers will be reading your blog via RSS - because they are probably reading a bunch of blogs and RSS allows them to keep up with dozens or hundreds of blogs very quickly. Your website most likely doesn't have an RSS feed but the blogging software automatically creates one.
Google Loves Blogs
When you update your website, you may have to wait 4-6 weeks for the Google spyder to get around to finding and indexing your updates. On the other hand, the instant you click that 'Save' button at the bottom of your blog's 'Compose New Post' page it pokes Google and your updates are indexed almost immediately. I've seen blog posts show up on Google 45 minutes after they were written.
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Even with something like 121 million blogs out there, having one is still seen as leading edge.
Podcasting
Wanna do a podcast at publish it on iTunes? There is no easier way to do that than through a blog. In fact, if you have your blog's RSS feed hooked up through Feedburner then it's almost automatic.
Other reasons
There are other reasons too. You can configure your blog to actually also be your website. Doing so allows you to leverage the blog's great content management features to allow you to easily create and maintain your website.
