A blogroll is a list of links to other blogs that you read and wish to recommend to your readers. It's a great way to declare that you belong to the blogosphere. It can also be great for generating traffic. How can that be the case when it's you sending traffic to other blogs? Well, the benefit comes to you from something called link reciprocity.
Bloggers are pretty keen when it comes to checking their stats and tracking their referrals (more details on this in the next chapter). When they notice a blog (that is, yours) sending traffic their way, they will most likely check it out. If they like what they see, there's a very good chance they will add you to their own blogroll, and you get the chance of receiving traffic from them. Even if you don't make it onto their blogroll, you will certainly be on their radar...