[albahk]

Since a blog can be an integral part of your company and the "voice" that people hear I think its worth doing a custom theme and Wordpress install to match your site design and host it on a sub-domain (but on a different server for security reasons, as mentioned in this thread).

If I see a http://webapp.posterous.com blog for a company with the default theme I think "Oh, this is probably another MVP this guy churned out over a weekend".

I've always like http://blog.twitter.com which is a blogger-hosted blog, but with a very nice design.