Steel is a mixture of mostly iron with a composite of carbon or other hardening agents consisting of about 2% of the overall mixture. The carbon in the mixture provides the extra toughness that is found lacking in pure iron. Steel can also consist of other hardening agents, such as tungsten, but carbon is by far the most commonly used. A steel saw blade will provide the sharpness and toughness that is needed to power through materials such as lumber with ease.
Although significantly less sharp than a carbide or diamond blade, steel is an economical choice for most jobs. A steel blade will give you adequate sharpness for any job involving plywood or OSB. Steel blades are decently priced, coming in at significantly lower prices than their carbide or diamond counterparts. For personal use and hobby projects, a steel blade should work perfectly.
In an industrial setting, however, a steel blade simply will not measure up. Industrial settings involve cutting through materials rapidly and repeatedly, often for hours at a time. A steel blade will heat up and break if too much demand is placed on it. It is generally accepted that carbide and diamond saw blades have significantly longer lifetimes and are less prone to over heat and break. Steel blades suffer from increased wear and tear in many situations, and in such cases, a carbide or diamond blade would be a better choice.
The pricing on steel blades is an attractive feature, opening up choices that may have been too expensive with carbide or diamond. A DeWalt DW3372 10″ 80 tooth saw blade costs $14.43. A 10″ 80 tooth Irwin steel saw blade costs just $11.92. By comparison, a 10″ carbide saw blade by Craftsman costs $34.99. A 10″ diamond saw blade by CRL runs as high as $98.02.
A diamond or carbide blade is really only necessary if you expect to find yourself doing masonry or metal cutting work, or fitting the saw to run for hours at high speed. If this is the case, then they may be a good choice. A steel saw blade will serve you well on your personal projects, but if you work frequently with the saw, you may find it worthwhile to go ahead and pay extra. The tougher blades will last longer and perform better, thereby paying for themselves after a while.