Newsletters are one of the must have marketing tools for your blog. There are many advantages of having a newsletter for your blog

• Promoting your blog - You can promote your blog using the News letter. You can periodically sent latest information and changes about your blog, request feedbacks and keep in touch with them. There are cases where you would like to get some information from your subscribers.
• Monetizing your blog - When you have good number of subscribers to your news letter, you can get them to your blog and inform them about a new post. When you have more visitors to your blog, you get more advertisements and finally more revenue
• Special Announcement - There are cases when many subscribers do not visit your blog, you can send announcement about something interesting to them and bring them back to your blog
• Boosting your sale - Suppose you have a new product which you want to sell through your blog. You can send a news letter and increase your sales

News Letter Websites

I have used two newsletter service providers

Aweber and Getresponse - Both of them are paid services, but I feel its worth to have one, but you should use it periodically to send some announcements and information

Using Feedburner subscribe through email facility you can send your posts by email, but not special announcements.