I've just added the "Followers" gadget to my sidebar and I've just uploaded all my google reader feeds (122 of them) into "blogs I'm following" in my Blogger Dashboard.
I actually have no idea what any of this means. I think it is just a way for people to know who is visiting your blog without them having to leave a comment. So if you are one of the 142.7 people who visit every day, you can click on the gadget on the sidebar and something will happen that is truly wonderful. Again, no idea what, but it has to be good doesn't it??