I'll go back and post about #2 later (I was just so blown away by it I don't know what to say! :) ).
I tried the Google Reader, mostly because I already have an account on Google and it was the easiest to get to. It was somewhat easy to find major feeds and to add blogs from Blogger, but I couldn't get blogs from other places like MySpace to show up on my account. For people who have numerous blogs/sites to keep track of and like getting constant news updates I can see how this would be beneficial for them. For myself, I wouldn't really use it. I have my friends' blogs bookmarked and I only use a few sites for news.
It would be much more convenient if the updates somehow showed up on my blog, so I could see it all on one site.
It's not really something that would apply to my work, but for others, perhaps.