Beth Kanter raised a great topic in a comment here the other day:
Speaking from the viewpoint of blogging for personal expression, I know I had to get past the fear of being "naked" online - from making a public typo, writing something that might be perceived as stupid, sharing an idea that isn't totally thought out yet (like this comment) or whatever.
I think that's an essential concept to keep in mind for any web publishing effort, whether it's a informal, personal blog or an official organizational site. It does feel naked to write online, and you will worry about being uncomfortably exposed. I did--and do.
But whether you're an individual worried about looking foolish, or an organizational leader worried about staff members airing dirty laundry in public, you're still facing the same challenge--you have to weigh the risks of exposure against the risks of invisibility.
And if you're not taking part in the kinds of conversations now happening online, if you're not using your web presence to speak authentically and participate in interactive discussions, you're going to become invisible--because the people and the organizations who are taking those steps are simply going to be much more interesting to pay attention to.
There are limits, of course, but it's pretty easy to know when too much information is more than enough. I've said it before in the context of this discussion, but it bears repeating: If Microsoft can let Robert Scoble report candidly from the depths of Redmond, then you and your organization can take a similar risk.