Here's the issue: You're a perfectly well-behaved bathrobe blogger (or, well, maybe you're not so well-behaved), but your commenters can get downright nasty. They write defamatory things, they post trade secrets about your competitors, they intimidate and harass. Can you be sued for what they do?
The answer lies in a relatively obscure federal law, known popularly (at least among Internet lawyers) as "Section 230." This is Section 230 of the Communications Decency Act (yes, the CDA that was declared mostly unconstitutional). The full text appears at 47 U.S.C. Section 230. Section 230 says: "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."
The original point of this section, which was passed in 1996, was to immunize OSPs (such as AOL and Compuserve) from liability for what happened on their bulletin boards and in their moderated fora. It also was designed to immunize ISPs from liability for what passed through their systems, and for material that they merely hosted. The law relies on an old distinction between "publishing" material (making it your own, even if you didn't write it) and "distributing" material (selling it or making it available). Ordinarily, "publishers" are liable for harmful third-party content; distributors are not, at least not until distributors become publishers -- which they can, sometimes, if they know the contents of what they're publishing.
How does Section 230 work? A newspaper is a publisher, legally speaking, so it's liable for what its reporters write and for what letter writers write, too. A library or a bookstore is a distributor. Under Section 230, an "interactive computer service," which is a category that includes ISPs, should not be treated as a publisher. Moreover, a federal court's interpretation of Section 230 in 1997, in Zeran v. AOL, gave Section 230 a very, very broad interpretation, and gave ISPs even broader protection from defamation claims than Congress may have intended. Zeran ruled, in effect, that an "interactive service provider" is not liable for defamatory third-party content even if the service provider actually knows that it's defamatory, and doesn't remove the content. Zeran has been very influential in later cases; aside from Congressional intent, that influence reflects a strong public policy sense that the Internet should not be regulated too heavily.
The question in the blogosphere is whether a blog is an "interactive computer service," given the way that Section 230 defines that phrase. Without belaboring the point here, the answer is: maybe; in fact, I'd be willing to say that usually, the answer is yes. With respect to third-party content, a blog is probably a mere distributor, not a publisher, so usually the blogger is not liable for third-party comments on the blog.
But we're not done. What if the blogger is given actual notice of a defamatory comment on the blog? For example, what if the blogger receives a cease-and-desist notice that points out the defamatory material? Does Section 230 still apply? The majority rule, following Zeran, is yes, so the blogger is in the clear, but there are other views. Right now, in fact, this question is in front of the California Supreme Court.
Finally: If Section 230 applies, is the blogger entirely in the clear? No. Section 230 clearly applies to defamation and other, similar tort claims. It does not apply to claims under intellectual property law. It isn't clear from the text of the statute whether Section 230 applies to trade secret claims. No court has ruled on that question yet.
So, please, if you comment on this post, no trade secrets please. I can't afford it.