Many people go the word press route, some even use the free Blogger.com service which you can point a domain too as well. A great product, Microsoft Live Writer is also wonderful for managing blogs, posting to them quickly and easily posting images and such to it. Definitely do the subdomain of your main domain as this will lend some SEO cred to your site. Most people pick wordpress so far is what I have found.
We also have an RSS reader snapin as part of AmeriCommerce that will suck in the blog entries for posting on your site in the home page or other areas, as seen on www.americommerce.com home page at bottom. Handy little fellow.
Ed Sturrock
AmeriCommerce Product Manager