On an anecdotal basis, blogs have been holding newspapers accountable for awhile now. CBS' "Rathergate" is the most recent, well-known example.
Regret the Error is a new blog that does nothing but report on newspaper errors. The site claims it "reports on corrections, retractions, clarifications, and trends regarding accuracy and honesty in North American media."
Will blogs end traditional journalism as we know it? Nope. Will blogs create competition and force traditional journalism to evolve and, in the process, improve? Regret the Error is one example that they will.
Here's an idea. After the slew of CEO crises, we're finally starting to see CEOs get out in front of the issue. Best Buy's CEO gave his bonus back to his employees for example. Well, wouldn't it be great if The Gray Lady or WSJ created their own retraction blogs? Don't be surprised if you see one soon.