Identifying viewers, and what they want to read, is a really critical part of building traffic. Susan and I installed Google Analytics some time ago, so we've been tracking our traffic fairly consistently over the last six or so months. We get a pretty good view on where our traffic comes from (go Google organic search! including some keywords that I'm particularly proud of), and which content our readers are coming for (mainly front page; but, from me, also Welcome to Amazon's EC2 and Seattle Conference on Scalability).
Google Analytics and Feedburner are a couple of ideas for tracking site traffic. But I'm more interested in hearing what you have to say, so please comment and include why you read our blog (e.g. "Susan works at Google!" or "Nick is an awesome tech master!") and how you like to measure your traffic.