There are rather good SEO reasons not to do that - specifically, if the blog becomes popular, the search engine ranking won't translate to the main site if the blog's on a separate subdomain.
www.foo.com/blog/ is almost always a better idea than blog.foo.com unless you don't care about organic traffic.
www.foo.com/blog/ is almost always a better idea than blog.foo.com unless you don't care about organic traffic.