It describes the <%blog%> skinvar as
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The "1" is the blogid, the "default/index" is the template used and the "20" is the number of items to display. Just change the "20" to the number of items you want displayed.
<%blog%> doesn't take a blogid parameter, does it? This is almost the <%otherblog%> skinvar, except blogid should be the blog shortname. I wanted to point someone to the FAQ, but it might confuse newbies.