RSS= Really Simple Syndication Why is it important to a site owner? Well if the site owner provides info that is useful to others it will be picked up and spread over the web. It's all part of the new web 2.0 It is simply but another piece of the advertising puzzle, now you just got figure out where it goes in your scheme of things.
Not exactly sure which part of RSS you mean, but I use it in two ways. I put my own rss feed on one of my sites to get more traffic and to keep the content fresh, and I also encourage visitors to subscribe to my rss feed to keep them coming back. This doesn't work so well though if you have a site that's non-techy. There are still tons of people who have no clue what is it yet.
Its great for owners of an article directory. I run article-gems.com and to help my authors get their articles spread way and far over the internet I submit numerous feeds to RSS feeds which can help to increase traffic to their sites. RSS feeds are also a great way for people to get information just on the topics they are interested in.
By my first point I'm assuming you mean where I put my RSS feed on my website. I just use Feedburner to get a piece of code so I can put my RSS feed from my blog onto my website and it shows snippets of each post. That way people from my site might read the posts and click over to my blog. Is that what you mean?
I generally don't get time to visit all my favorite sites so if they have RSS I throw them in FeedReader or Outlook 07 and know almost instantly when they are updated. I post on 7 forums with RSS and they provide me with new posts on a regular basis. It saves me from having to constantly go back to the same forums.
RSS Feeds can be a great source of Deep Links. Here's a page all about it, inspired by a thread here at DP: > www.squidoo.com/deep-links-with-rss-feeds/ Cryo.
RSS can be seen as an evolutionary step to the bookmark, in fact Firefox calls an RSS subscription a "Live Bookmark." A bookmark is only useful when the user clicks on it but in most RSS readers there is some visual/audible notification when new items are available so the user is more likely to visit your site.
RSS is very good to have, I would submit your RSS feed thew Ping-0-Matic or an alike site. It will bring visitors.