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According to Markus at Plentyoffish, Digg's editorial is decided by less than 60 people. That sounds like old media to me.
I think of blogs as nothing more then a distributed forum. Each blog represents a forum thread, and what sites like DIGG.com, Techmeme and bloglines etc are trying to do is recombine these separate threads into a forum again. The Digg.com model has no chance of winning, as less then 60 people out of 800,000 supposed daily users decide what everyone reads. The winner in this game will be the company that creates a personalized view of the "blogosphere".
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