Blogopoly

You may already be checking your log statistics for the number of hits you get to your blog. Have you ever had a look at the referrers to your site? Most Site statistics programs give you a listing of the sites that users came to your blog from.
Have a look at these sites, sometimes the sites may be singing your praises, you may find sites that would be useful to link back to.
You can also learn a lot about what users are looking for when they discover your site - perhaps the topic is underrepresented on your blog.
Also check what keywords are being used when the referral comes from a search engine - clicking on the link will show you were you are listed in the rankings for that keyword. If someone has came to your site via that keyword even though your blog is way down the rankings, then that indicates you could get an awful lot more traffic if you move higher up the rankings for that keyword - try and mention this keyword or topic more often in posts.

Another useful exercise is to check the site statistics of similar blogs to your own, either ones that you discover by browsing, those that link to you or those you link to. More often than not, blogs use free statistics programs, such as extreme tracking or onestat.com, and these will often have buttons on the blog (I have both at the bottom of this page) that you can click on to see their statistics. Click on these and look at their referrers - you will find many new blogs to create link exchanges with, new directories to submit to, or new forums to post to. If these sites are sending traffic to similar blogs as your own then they will send traffic to your site as well. This is a great way to find new sites and blogs to exchange links with.

Creating link exchanges is a great way to increase the reach of your site, and also introduces you to new friends or potential business partners. Don't just leave it at that once you create a link exchange, visit the sites you link to regularly and participate in discussion on their site if possible, send them articles to post on their site if they are interested in guest blogging. Keep in touch with them and build a large network of fellow bloggers or site-owners. This is the number one rule in blog promotion in my opinion.