When you set up a blog from blogger.com there is an option where you can host the blog on googles server as your domain name, you need to create a sub domain for you site like "blog.mysite.com" and then add the dns server address's that google provide to your domain in zoneedit, within 48 hours your blog will be working for "blog.mysite.com"
A less complicated way would be to simply add the blog to a separate folder under the root. Something like: example.com/blog Then you don't have to play with setting up a subdomain (if you're not comfortable with that).
I would just have gone for a quick and dirty frame based solution without going deeper. I'll have to read up on the alternatives as I want to do a bit more with the little blog that I have been playing with for the past year or so.