Niall Kennedy of Technorati has some good thinks to say in this post. I agree that companies should not restrict employees from blogging on their personal time. I can also appreciate what he says here quite eloquently:
Employers considering a blogging policy are not thinking broadly enough. Employees need to be trained as better, more effective communicators, and any blogging policy is really just an extension of an existing corporate communications policy with the intention of educating everyone similarly to how an executive may receive training to deal with press and the public. Treat your employees as an important yet independent public voice and prepare to reap the rewards.