Hi Rufflez. You've asked a broad question and I would reply, "It depends."
First, how do you know the blogger really gets 5k visitors a month? Do they show you their actual web stats?
2nd, where would your advertising appear? Text links that are inserted within blog posts are worth a lot more than a little graphic button on the sidebar.
3rd, is the audience of the blog your target audience? You could pay a $100 for a blog that gets 100k visitors a month, but none of those visitors buy anything from you, you've just wasted $100.
If this is a blog that you've identified as the perfect market, see if you can offer $100 for a text link at the bottom of one of the blog posts for six months. Choose a post that is particularly relevant to your web site, and one that gets a lot of traffic. I think these are much more effective than having an ad on the sidebar.
In the end, a good price is something that brings in tons of qualified traffic that makes more money than what you are spending to get them there. I know that sounds lame, but there isn't any real standard price for any kind of advertising on the internet. Even Google AdWords can range from $.05 to $2.00 per click. Make the blog an offer and see where the negotiations go.