Talking to another Green Guy he mentioned James Hamilton's post. It is quite long, and I've heard many of these points already from others, like Christian Belady's presentation at Data Center Dynamics Seattle.

Why Blade Servers Aren't the Answer to All Questions
This note describes a conversation I’ve had multiple times with data center owners and concludes that blade servers frequently don’t help and they sometimes hurt, easy data center power utilization improvements are available independent of the blade server premium, and enterprise data center owners have a tendency to buy gadgets from the big suppliers rather than think through overall data center design. We’ll dig into each.
In talking to data center owners, I’ve learned a lot but every once in a while I come across a point that just doesn’t make sense. My favorite example is server density. I’ve talked to many DC owners (and I’ll bet I’ll hear from many after this note) that have just purchased blades servers. The direction of conversation is always the same. “We just went with blades and now have 25+kW racks”. I ask if their data center has open floor and it almost always does. We’ll come back to that. Hmmm, I’m thinking. They now have much higher power density racks at higher purchase cost in order to get more computing per square foot but the data center already has open floor space (since almost all well designed centers are power and cooling bound rather than floor space bound). Why?

So, where do blades work? I've talked to numerous green/energy efficiency professionals and in general they favor Sun or HP blades. The one thing in common from my informal survey is they run fully populate blade enclosures.

How many blade enclosures out there are fully populated? Not many, the vendors want you to have an excess of blade enclosures so you'll buy their blades.

Blade Servers work most efficiently when fully populated.

Where the Blade Servers are effective is for HW vendors to lock in customers to purchase their HW.