Whats the big craze with tumblr? Isn't it more or less like the new flickr?
Flickr is good at posting photos but nothing else.
Tumblr does the same but also includes: video, quotes, text (posts), links and music.
One thing that I love about tumblr is the ease of updating it to ensure your web presence (not to mention its simple setup functions). I think it's perfect for small businesses in gathering more audiences or traffic. If your only goal is to generate backlinks or increase your ranking then you might rather have to use other microblogging platform instead. There has been a lot of debate going on about tumblr's real seo benefits.
Is it also a micro blogging platform?
I guess it does fall into that category. As @wardcosbyson said - it makes it real easy to post quick short snippets of "stuff".
It's a quick way to create sites to generate backlinks
It is. But I guess you can also google that and see how it can hurt your link building campaign or seo. For real, I stopped using it for seo purposes only.
The Tumblr is a site for posting quotes, posting text, videos, music and photos, links and blogging.