batface - 9:32 pm on Jun 29, 2011 (gmt 0)

Having your blog as part of the site example.com/blog means that any link juice gained can be passed through to the main site, a natural progression.

My view is to stay clear of subdomains unless you have a big site with plenty of authority, where expanding into subdomains gives you the possibility of having extra positions in the results and you can use the main site to develop the subdomain.