According to Wookieepedia blasters are :
a ranged weapon that fired bursts of particle beam energy called blaster bolts from a replaceable power pack.
On that same page for blasters, under Blast Mechanics:
Instead of firing a coherent beam of light like the archaic laser, the blaster fired a compressed, focused, high-energy particle-beam that was very destructive, commonly referred to as a "bolt." Generating the bolt relied on two components: a gas cartridge filled with an energy-rich blaster gas (typically Tibanna) and a power pack. When the blaster was fired, a small amount of gas moved from the cartridge through the Heter valve into the gas conversion enabler chamber, commonly called the "XCiter". In this chamber, the power pack energized the gas, before it passed into the actuating blaster module, where the now extremely high-energy gas was transformed into a compressed beam of intense energy particles, coupled with intense light. The particle beam was then focused through a prismatic crystal or a similar device, which generated a deadly high-energy particle beam, fired from the emitter nozzle as a bolt of glowing energy. The color of the bolt depended on the gas used and the type of focusing device, and could vary from red to blue to orange to white.
As for why people don't use projectile fire arms on a normal basis:
If you think of the pure size of the galaxy far far away, with trillions of residents on each of millions of planets (my numbers are probably too small here) the probability of running into a Jedi who could reflect your shots is so small as to be not worth planning for. However there are some instances in the EU where projectile launching fire arms, called slug-throwers, are preferred. From the story Shatterpoint:
"Slugthrowers. I hate 'em. But they're easy to maintain. Day or two in the jungle and your blaster'll never fire again. A good slug rifle, keep 'em wiped and oiled, they last forever. The guerrillas have pretty good luck with them, even though they take a lot of practice—slugs are ballistic, y'know? You have to plot the trajectory in your head. Shee, gimme a blaster anytime."
Taking place on the jungle planet of Haruun Kal where a local fungus would destroy a blaster quickly, most of the ULF used slug-thrower rifles.