To start blogging, one can sign up a free one from WordPress or Blogspot, or download the entire WordPress platform and host it yourself. Note that Blogspot does not run on php platform. So there are some differences in this aspect.
The free Blog from WordPress offers a selection of great free and customizable designs for your blog and 3 GB of file storage. You can upgrade to your own domain name with a small fee.
When you have a blog hosted on WordPress.com, they take care of a lot of technical stuff for you. You never have to mess with installations or upgrades. You don’t have to create databases. You never have to deal with domains (unless you want to). All you have to do is create your blog, pick a theme (the look or design of your blog, sometimes called a template), and start posting. (quoted from Remarkablogger)
Nothing could be better? Right?
1. Can’t simply install special codes to have special contents (Java, PHP and CSS modification)
2. Can’t fully customize blog appearance according to own preferences (CSS modifications and etc)
3. Limited plugin capabilities (require to use only the available plugins provided.)
4. Slower bandwidth, it tied to common servers with thousands of other users worldwide. If a certain international under-sea communication link is broken or under maintenance, you will be affected like everyone else.
5. Only provide limited space for image hosting.
Although nowadays many user use free image hosting service such as Flickr, Imageshack or Photobucket but there are some limitations.
There is limitation with Flickr also. After you have uploaded more than 200 images, you will have to upgrade to Pro version or register another new account (but how many accounts you want to have?). If you don’t do this, the image will not be visible.
So with all the limitations listed at above. Why not having your own web hosting with a domain name that you always wanted.

Both option has their pros and cons but in nutshell if somebody is serious about his online presence it is advisable to have own domain and hosting, so in case if you want to go from blog to your personal website or any other application your identity will remain same.
Best regards,
Shailendra Vijayvergia
Indeed, PR building is one way ticket and can not be undo in a way. Building it to your own domain name and accumulate the values can not be done with free Blog Hosting.
Hmm, very cognitive post.
Is this theme good unough for the Digg?