We, and others, have often felt that one of the best uses of the internet is to disseminate local - very local - news. Local newsletters/online newspapers will never win millions of daily viewers, but if they can pick up some local ads (and if the area has broadband), it's a better biz model nowadays than the dying dead tree format.
Our pal Greg Sullivan has just begun publishing The Rumford Meteor. Pretty slick for a small town rag, and a good model for what can be done.
Among other things, he posted this video of Maine clam diggers: