I wouldn't call myself a "fan" of Jason Calacanis, but I must admit he has a ton more experience and credentials than I do. One of the things I've heard him endorse a number of times is Google Analytics.
I do not know much about the service except that it is a service by Google for analyzing web traffic. It is ridiculously easy to set up on Google Sites. Just remember that it might take a day or so for it to register in the Analytics dashboard. It is also really easy to set up the service for Blogger blogs.
Analytics seems to measure real traffic, while Google's Webmaster Toolkit keeps track of how Google views your site. I do not really know more about how to leverage them, yet.