A blog is used for a number of purposes on a website. It may be that you have useful information that you want to talk about but do not want to clutter up the main navigation of your website or it simply may be there for search engine optimisation purposes. The reason people use a blog for search engine optimisation is to get new, fresh, relevant content on the site.
Knowing what to blog about can be hard for some, as you may not know exactly what your visitors will want to read. I see a blog as a place to show a bit of personality. It is nice for a blog to be a little more informal than your website. Talk about relevant news relating to your business, either within your own company or regarding your manufacturers. Keep it light hearted and interesting.
Some people allow people to add comments to a blog, if you are going to do this then make sure that you approve each comment before it goes live on your website.