There is an interesting (and long) article on blogging via Corante. The article is by Suw Charman and basically is what she brought home from the Blogs in Action seminar put on by the Six-Apart folks. One of the seminar speakers was lawyer David Carr who had this to say about libel:
In 97, someone pretending to be one Dr Godfrey posted to a Usenet group and said lots of horrible things about him, the real Dr Godfrey took the view that the comments were libellous. Faxed Demon internet, and asked them to take it down. Demon said it's nothing to do with them, they were just hosters. Godfrey took Demon to court and won - Demon said they were innocent carriers. But that only works up to the point that they have received notice of the libel. Because Dr Godfrey had noticed them, and not taken down the posting, they lost their defence.
Law does not require you to police your comments - if someone leaves a libellous comments, you are not necessarily obliged to do something about it unless someone notifies you, and then you must take it down. Difficulty is what is a plausible complaint and what is silly and frivolous. Puts blog owners in difficult position, because they will remove the offending item rather than face a lawsuit, although implication that someone wrote something libellous could also be interpreted as libellous.