Yep! they are okay but to expand you need a domain and its not easy to move from some free host to own domain. But as you asked, free blogs are okay
Yes, blogspot is good for SEO U can see demo My webmaster seo blog (pr 2) But i don't know how can add adsense in my post at blogspot
Yes you can use free blogs with adsense, providing that whatever host you use hasn't put their own adsense ads on there at the same time (most dont).