Technorati uses incoming links as a metric to rank blogs.
Del.icio.us and Digg (and other Digg-like) use voting mechanism.
Wikio uses a bit of both as well makes use of a semantic engine to categories the blogs.
Google as very complex algorithm.
I guess I’d like a service that “simply” make use of the number of comments in a post/blog. One could argue that this is exactly what coComment or co.mments.com is about but it does not seem to do exactly the job. coComment has ranks for posts and blogs but it is polluted by spam. So much that it actually makes it unusable, plus some features are missing. It would be nice to be able to set up our own timeframe (not only the last 10 days) and then add some filters (only french blogs, sport blogs). Maybe those filters could be added on top of the service but unfortunately coComment (neither co.mments.com) seems to have an API. This would really help to find out where does the discussion is happening.
Anyway the best ranking service one could think about is probably a very well-thought mix of all of these… to come I guess. Would be nice a nice mashup…
On a side note, I’d like to add that I have been testing the coComment Firefox extension. Kinda disapointing, it does not seem to work with all blogs (especially not with the I comment the most) plus it seems to be uncompatible with Prototype library (some website using Prototype did not work any more)