Lisa, you have come to the right place. I just did this last weekend. Here is how it looks on the page: http://fidalgoweather.net/crossings.aspx. Click on the bridge and it will take you to the actual blog. This is probably the easiest way; here are the steps:
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Sign up for a Windows Live Spaces blog. There is no cost. There will be a banner ad, but no ad will show on your web site. If you have a premium Live, Hotmail or OfficeLive email account ($20.00/year) you can set it to be ad free. Use the premium email account as the Windows Live ID to sign up. There is a link on my blog you can use to sign up. There is also a link in the Office Live mail pages.
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There are a zillion colors and designs available for the blog itself. You choose templates, modules, etc. just as in Office Live.
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Once you have your blog account, use the blog module in Office Live to send the postings to your site. It works just like all of the other modules. You will be asked for the address of the blog.
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You can format the embedded postings just like the other modules. Use a pilot character to set font colors etc. With the cursor attached to the pilot character, load the module on one of your pages. Then delete the pilot character.
There are other ways to do it, but as I say, this is the simplest. It's also a blast to do. If you go this route, I have another tip. Let me know. Good luck.