People who write about monetizing blogs often suggest that a blog should be hosted on my own domain not on blogspot (or blogger) or some other blog host. Why is this? What are the disadvantages of hosting my blog on blogspot.com, in terms of making money? How does it affect the traffic and my pagerank?
Well, look at it like renting a house or getting a mortgage, you put all effort in to building backlinks and traffic, but only one of you is going to walk away with something of value.
Disadvantages, you can't switch to a real domain even if you want to, it's unprofessional, you're pretty limited with what you can do with the site, both design and content wise, and it's not as brandable. The same blog on a blogspot domain and a .com domain will definitely do a lot better on the .com. If you really like Blogger, just pay the $8 for a domain and host it there for free with Blogger.
Wyattt, this is exactly what I did with my new blog. I put it in a subdomain name of my principal domain and host it in blogger for free. The problem is that blogger platform is very restrictive in comparison with wordpress, but I think it is worth a try Maybe Dario82 can do the same.
I wrote an item about this at th weekend - it says historian's in the title, but it could be for any blogger; http://www.historynexus.net/future-retro/historians-guide-to-blogging-part-one/06/2008