I assume you mean wordpress.com. They offer paid upgrades on blogs hosted with them. Also, I believe they sell a supported version of the script they use to manage the site. I'd say most of the revenue comes from the paid upgrades, though.
Well, let's do some estimation. According to Alexa, MySpace has a reach of around 5%. MySpace has about 200,000,000 users and I'm sure many more that aren't users that view the site. Wordpress.com has a reach of around 2% and I'm sure many people that aren't users but still view the site so I think it is fair to compare them. 2% would translate into 80,000,000 users. If only 5% of that user base purchased a $10 upgrade during the year it would mean $40,000,000 in revenue. Now, most of the upgrades are monthly instead of annually and even if far fewer than 5% actually purchase an upgrade that could still account for $57,000,000 in revenue. I think it would be fair to say that most of the revenue comes from upgrades. You'd be surprised the people who would be willing to pay Wordpress.com $10/month for some feature on their blog instead of going through the hassle of setting up their own domain and hosting for as many features as they would like at roughly the same price. It doesn't make sense to me either but I'm sure that is where the revenue comes from.
Nice calculation! Also I want to tell you here that, Alexander Levin the owner of Wordpress also owns Imageshack which is generating $56M per year!