Google Reader has improved - now that would be a tautological statement. I have finally shifted all my feeds from Bloglines to Reader, but I sorely miss one feature of Bloglines.
Check these two images, they are images of the same feed in Bloglines and Google Reader.
Feed in Google Reader
Feed in Bloglines
Click on the images for larger size
They are almost the same, except for one small thing. In Bloglines feed, the category chosen by the author/writer is shown, whereas it is not displayed in Google Reader. The category being shown is especially useful when the feed is of Blog-Filters like Desipundit. There are so many posts linked to by DP that knowing the category helps a lot in filtering the posts.
Google introduced labels in Blogger Beta, hope they start showing those labels in the Reader.
Technorati: Google Reader, Bloglines, Labels, Categories
Google sure would !
It always that I make a wish for a feature in gmail and they come up with that in the New Features in sometime. They are doing a really good job considering that its only 9000 people working ! 
Yup .. I agree with Summu… Google is like a mind reader at its best .. one thinks of a possible change and sooner or later its there in their products…
just wait for the new upgrade of google reader.
sumanth, rakesh … I agree… Invariably the feature you think of, or you need is provided by Google…