My view of PR may be a bit different from others, to me it is about influencing people to create positive dialogue around the organization that hired them. What a PR agency historically did is to influence analysts, and writers, which resulted in articles that would influence potential consumers. Today all those channels exist but are just in much greater numbers.
In the past writers and analysts were associated with specific media outlets. Today bloggers, and micro bloggers have been added to the mix and can be just as powerful as the traditional media in creating dialogue. Some may argue the bloggers and micro bloggers hold even greater influence over the dialogues that are generated.
So the real challenge is how can organizations take the offensive to lead and initiate positive conversations. How can an organization influence a dialogue when they may not even know where that dialogue is happening?
A good PR person can adjust to the changing environment and work to influence the traditional media (which is still important) and to now influence and even create the dialogue through new mediums.
Ironically a company now has a lot more power to try to influence conversations with in their own walls. Considering the amount of employees who use social networks, an organization has built in broadcasting capabilities literally at their fingertips.  Treat every employee as a broadcasting syndicate and now you have a team of influencers to work with.
PR is not dead. It’s evolving.