I wrote a long comment in response to a comment on my most recent blog posting, then decided to use it as a blog entry instead. You can scroll down and read the comment first, if you'd like, or just read the answer here. It's about PR, and the pressure to do a lot of it if you're an author.
I think in this day and age, a website is a must. If I did nothing else for PR, I would do this. It's a fast and easy way for your readers to find out about your books -- what's out, what the books are about, and what's coming. You can keep the personal info to a minimum, if you'd prefer. If time is an issue, you can pay somebody to set it up and update it for you. I used to update mine every week, but with the blog, it got a bit much, so I don't update the site as often. I enjoy doing it, so I still update it fairly frequently.
Re author pics. Some readers apparently like to see what an author looks like. Your publisher may require one, so this might not be optional.
Booksignings -- I find these pretty much a waste of time and effort. Agents don't, I gather. But they aren't the ones sitting there alone, like Oliver Twist asking for "more," thinking of all the other things they COULD be doing. FWIW, I think being president of your RWA chapter is better PR. Also writing articles for your chapter newsletter, which may be picked up by other chapter newsletters (and which, come to think of it, I should be doing more of, as well!). Ditto giving workshops at smaller conferences or RWA national -- and booksignings at such events are usually well attended, too. So if it's personal appearances your agent wants you to make, local booksignings may not the best in my experience, but there are alternatives.
As for blogs, I think this is much more up to you and your time. I cannot even imagine trying to write a book with four kids under ten, let alone blog, etc. etc. However, you don't have to blog daily, but could do it weekly, or whenever you have the time. And they don't have to be long entries. But I would consider the blog the most optional of all PR ventures, at least at present -- unless you choose to have only a blog. I gather some authors do this. My concern would be that you wouldn't be able to have a lot of information about your backlist there. If you're not yet published though, this might be a good way to start an internet presence, and you can do a website when you have a second book on the way.
As for a change in profile or sales from a website or blog? I couldn't point to either one and say, "Ah ha! Lookee there! What a surge!" The effectiveness of most PR is hard to measure, especially author-driven (and paid for) PR.
I can appreciate that an agent wants an author to be out there promoting herself in this day and age, especially on the internet. However, I still believe no amount of PR an author can do can top writing good books. If your writing is really going to suffer because you're on the internet or at booksignings instead of writing, that's not good.
Writers who have other jobs, whether it's another paid gig or motherhood, have to find the balance that works for them. For me, it was family first, writing second and PR a distant third. Still is. Maybe I'd be more successful as a writer if I had other priorities.
But I wouldn't be nearly as content, and that's the bottom line for me.