Both options are pretty close to the same now. Their use to be more things that you could do with one and not the other. Now, the biggest thing is just the URL that people can use to reference their blogs. For example, do you prefer blog1.yourdomain.com or yourdomain.com/blog1 Either way works. Now it seems like it’s more down to preference for the URL structure. Personally I use the subdirectories since I like the way it looks. Then, you don’t have less internet savvy users who type http://www.blog1.yourdomain.com and get mad that it doesn’t work.