Absolutely an internal blog on your website if it is related directly to the subject of the website is a great asset.
I'll admit originally with one of my websites I produce a blog solely to get better search engine rankings and some of my articles were indexed quite high on the search results which produced traffic to the website all interested in its content.
I now produced blogs on my websites and find it more fulfilling because I enjoy spending my precious time working on it and know that it will hopefully be of interest and also it scratches my back in return by getting the articles indexed and also to some degree producing brownie points for my website rankings.
If you produce an external blog obviously there's a very definite chance that Google will not associate your work to your website, and not improve your search engine ranking.
