If you want to create a blog site with an url like http://servername/blog/ in sharepoint, you can either create a site collection as the root site and then you can create the blog site under the root site.
1. Create a new web application under port 80, re-use the port 80 application pool
2. Create site collection for this web application, choose team site template
3. Say the root site is http://myserver/ or http://myserver/default.aspx
4. Choose site actions, create
5. Under web pages, click Sites and Workspaces
6. Give the site title Blog, choose the blog site template
7. So the site url will be http://myserver/blog/default.aspx
Or you can create the blog site as the root site of the site collection.
1. Go to Central Administration, Application Management
2. Under SharePoint Web Application Management, choose Define managed paths
3. Add a Path called blog, choose Explicit inclusion
4. Create site collection, give the site title Blog, choose the blog site template.
5. Make sure the url is http://myserver/blog , click create
6. Now your top level site url is http://myserver/blog/default.aspx