I am using Blogger.com for my blogs.I was checking for the same kind of services from Microsoft.I found it today with my hotmail id.Yes it is teh Windows Spaces from Microsoft.It is having cool interface in Ajax and it was having all controls embedded for entering and editing the blog you are writing.You can tag your blog as a seperate category as you can do in blogger.com.

The main advantage I found is you can easliy emdedd Image and videos which was a bit tricky in Blogger.com.And always you have a cool tool from Microsoft called

Windows Live Writer for easy blogging.Any how the competion between these giants like Google and Microsoft is giving more opportunities for people like us to get FreeSpace and latest technology based product for blogging.