A blogroll is a list of links to blogs that the blogger likes. A blogroll is usually included in the blog's sidebar. Some bloggers divide their blogrolls into categories. For example, a blogger who writes about cars could divide his blogroll up into categories for links to other blogs he writes, other blogs about cars and other blogs he likes about unrelated topics. The blogroll can be set up based on each blogger's personal preferences, and it can be updated at any time.
It's an unwritten rule in the blogosphere that if a blogger puts a link to your blog in his or her blogroll, you should reciprocate and add that blog's link in your own blogroll. Of course, each blogger approaches this with their own blogging goals in mind. Sometimes you may not like a blog that links to you through its blogroll. There are many reasons why you may decide not to reciprocate a blogroll link, but it's good blogging etiquette to at least review each blog that links to you through its blogroll to determine if you'd like to add that blog to your own blogroll or not.
Blogrolls as Blog Traffic Boosters
Blogrolls are great traffic driving tools. With each blogroll that your blog is listed on comes the possibility that readers of that blog will click on your link and visit your blog. Blogrolls equate to publicity and exposure across the blogosphere. Additionally, blogs with many incoming links (particularly those from high quality blogs as rated by Google page rank or Technorati authority), are usually ranked higher by search engines, which can bring additional traffic to your blog.