Last year Tom Grubisch examined a number of local "citizen journalism" projects and declared that what he found, "apart from a couple of honorable exceptions, is the Internet equivalent of Potemkin villages -- an elaborate façade with little substance behind it."
A year later he reexamines these projects for OJR.org. He finds some signs of progress, but also has some harsh criticisms.
Meanwhile, writing for NAA's Presstime monthly magazine Michael Snyder takes a look at several newspaper-related projects. (I am quoted in both pieces.)
Update:Also note the Kelsey Group has an interview with Backfence CEO Susan DeFife.