I read blogs of my blogosphere friends, my 'normal' friends who blog and sometimes other interesting blogs that I happen to come across while reading or surfing the Net.
I get an idea of my blog traffic through Sitemeter on a weekly basis via an automated email report. I'm also able to see where my readers come from, at what time of day and keywords used in searches that point to my blog via MyBlogLog and Nuffnang.
It's interesting to note bloggers are of course the main bulk of blog readers. Then there are those who are very much into a particular topic (for e.g. political commentary) or a fan of a particular blogger (could be a celeb, a specialist).
On the other side of the fence are people who are not aware that there is such a thing called a "blog". There are also those who don't really care for blogs, be it an intelectually-stimulating, entertaining, educational or informational one, or one that simply belongs to a close friend sharing his daily thoughts and life.
People read blogs for many reasons, depending on the blog's content. If you want to generate high traffic for your blog be it for fame, money or ego or whatever, you should write about what people want to read. Get a target audience. It is easier to write about something you are interested in or passionate about. Armed with knowledge and putting your 'heart' or emotion into writing makes it easier for you to write. The words flow much easier and you'd seldom encounter writer's block.
That's my two cents' worth about blogs, blog readers, non-blog readers and blogging. As for my blog, it's my avenue for psychotherapy and an open journal. When people ask me what's been happening in my life, I tell them "Read my blog". If they are not blog readers and still really want to know, I'm inclined to say "How about a drink one day?". I'd know then if they really want to know what's been happening! Hee hee.