The other week Read/WriteWeb ran a survey that asked, "What type of RSS Reader do you use the most?"
At the close of the poll, 52% of the 1,187 people who answered the survey said that they mostly used a Web-based RSS Reader. Following in a poor second place were Desktop readers (19%), while Email-based clients ranked lower than other Web-based options. And as one commenter pointed out, Web-based options are the most popular (76% at final count).
"There are some influencing factors to consider. Desktop RSS readers are not always free, some of those that are free are add-ins to Outlook which is not as popular in the consumer space as it would within a corporate environment.
The results make sense for consumer use. Enterprise use I imagine would be different - as adoption grows behind the firewall, I would expect to see IE7 and Outlook pop up a lot more."
I'd add that another reason that externally hosted Web-based RSS Readers are popular is that people are currently reading external content and at work a Web-based client is the only option available - once (or if) internal content becomes available in the form of RSS, the results of such a poll might be different.
I would also consider that usability of the individual RSS Reader is also important. For example, I'm currently using Microsoft's Windows Live Writer to put this post together - before that I've used lots of different interfaces to my blog, but right now this fat client interface is my favourite until something better comes along.