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I think the main issue could be that "normal" people won't have heard of RSS, and clicking thru onto a raw xml page could confuse them. I'm also interested to know others experience with this...
RSS feeds as a tool for increasing internal links interests me though. It's on my list of to do's, but I have a feeling a new products feed would help get products indexed quicker.
We already do XML data feeds for paid inclusion. This this almost the same thing. I figure, ifit takes less than 5 minutes to set up the line (which it would), I might as well offer it, just in case. It never hurts to be ahead of the game, epecially if it's easy.
On a small news site I regularly visit they have a top 10 list of most popular products text ad by an online store automaticly updated via RSS.
Recently I had back in my mind a widget I needed to buy. One day that widget appeared in their ad, clicked on the product link, noticed the great price and bought it.