Let's go straight to the horse's mouth, Jon, and see what "w3.org" has to tell us about blockquotes:
http://www.w3.org/TR/html401/struct/text.html#h-9.2.2
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These two elements ([BLOCKQUOTE] and [Q]) designate quoted text. BLOCKQUOTE is for long quotations (block-level content) and Q is intended for short quotations (inline content) that don't require paragraph breaks.
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See that, Jon? A blockquote "designates quoted text". No more, no less.
It goes on to tell us:
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The usage of BLOCKQUOTE to indent text is deprecated in favor of style sheets.
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