Блин - это эвфемизм от "блядь". Может выражать раздражение или быть словом паразитом.
Are you kidding her? As far as I know, the word "блин" is way more moderate than "бл@дь". Using the latter you may sound VERY rude. While the former is quite ok to use, it's just slang.
@kamilion: it's more like "ouch" (an interjection).