I gave a presentation along these lines at the IDSA conference last year. You can pull the presentation slides here:
There are a few approaches:
-reviewing blogs to see how people are reacting and, yes, somethimes even using products (I have an example in the presentation of someone blogging their experience with the new apple mouse)
-creating a subject specific blog as a way of gathering comments and feedback from a niche audience
-observing corporate and/or designer blogs for trends and ideas