Do pictures help my blog?

Echoing what Ty said in one of his answers, graphic elements certainly help the reader's experience and can actually help bolster your argument, but that said, they're not required and the writing is what will actually help or hurt your cause.

Are previous finalists eligible?

Yes. And I already see a handful back for NGS 2, but simply because they made it last time, doesn't mean they have a spot locked up in the finals this time.

What can I do to help my chances?

One thing that I pointed out in NGS 1, and certainly helped some of our finalists land their spots was participating in the "community" of the blogs. That means commenting on other people's blogs, something like having a post on your own blog talking about some of your favorite posts by other authors, or just going through and listing some of your favorite blogs in the "My favorite blogs" part of your blog.

Will this help a lesser writer get the nod over a better one? No, but it could certainly help serve as a tiebreaker of sorts.

Hope that helps a little, and I'll be back later this week with a look at some of the blogs that have caught our eye so far.

-Tom