I'm just now starting to meet my physical blog neighbors. I can already start to see a virtual community forming with all the trappings of communities in the real world: neighbors and neighborhoods. The blogosphere is just aching for someone to bring the killer app that combines physical location and the opportunity to expand your identity through mediums like blogging, and technologically through RSS. I can imagine an RSS/Blog chat that would just be AIM + your away message on steroids. Someone ought to layer friendster, xanga, and IM ... I see a hot start-up waiting to happen here.
I worked with Trepia for a bit to implement this, but they were more interested in people dating than sharing their lives. Check out their app design though, I think they're on the right track.