Commenting on John Battelle's RSS Marches On...Net-based Aggregators.
RSS readers are a fascinating area, and I think the right mix between client and server processing has not been found yet.
There's clearly some room for innovation left in this area.
I started with Radio, which has an integrated RSS reader as a local daemon, with the UI in the browser. I also tried AmphetaDesk, which is based on the same idea.
Then I've tried NewsMonster, a pure client side solution, with some projects to define a reputation system and collaborative filtering on the server side later. I found the ideas interesting, but the execution pretty poor.
I've tested blogstreet who have an interesting idea for offline use: they ley you get your subscription via IMAP. If your IMAP client caches the mails, you have an offline RSS browser, while still being able to use the web UI if you're online.
It's the same idea on the server as Abe Fettig's Hep on the client.
Bloglines is pretty good for just the web stuff, but it lacks a solution for offline use, such as IMAP access in blogstreet.
Today I use NetNewsWire, a pure client side solution that works only on a mac.