In the dot-com boom, every startup figured it would make a killing by
bringing people to its site and charging advertisers for visitors' ad
views and clickthroughs. When the crash came, it sounded like these
profits never materialized.

But lately all of the big web company announcements -- blogger.com
purchased by google, boingboing.net wins bloggies, this or that
blogger went pro and quit his/her day job -- seem to deal with sites
whose immediate profitability is questionable, unless the ads that
accompany their pages are bringing in a lot more than they used to.

Did Google AdWords change this? Are targeted ads worth so much more
than the old, random ad banners that they have revitalized a dying
business model? How many pageviews does a site need per month to meet
the costs of reliable hosting (which I imagine costs around $30 per
month to be ready to handle large traffic, the first 5 or so GB of
traffic free, and then a market cost-per-GB afterwards -- is this at
all close to correct?)?

Are many of the most famous bloggers actually making money off their sites? 

There are many questions-within-questions here; I would appreciate as
nuanced a response as possible, sample numbers for real or
hypothetical content providers, and links to relevant information.

I must say, you write well, and have clearly and with a high level of
understanding asked 'thee' question. Which is how much of what we hear
is hype and how much is solid, or maybe even further 'where's the
money'. I've watched this thread for almost a week now hoping to gain
some insights.

There's a saying:
The ones who talk don't know, and the ones who know don't talk.
I guess it's not suprising that those who know the answers to your
question arn't eager to share that information with the world. But I
was at least expecting some bluster, and am quite surprised, as I'm
sure you are also, at the total silence such an interesting question
aroused.

Newsweek this week has an article very close to this subject.
http://www.msnbc.msn.com/id/7369044/site/newsweek/

I haven't read it yet, but wouldn't be suprised if it also raises as
many questions than it answers. Perhaps though it'll give a few more
pieces of the puzzle, that we'll figure where and how and if they fit.

Thanks for such a thought provoking question.
Patrice