/blog is easier.. there's always debate if blog.domain.com is a separate domain or included in domain.com.

search through WPW and you should find a few threads talking about subdomain vs subdirectory weigh the options and go from there..

hehe... you can always use wordpress to run the entire site as a CMS and blog together and then have no issue above..

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Ron Boyd
website consulting (design, optimization, marketing) :: Follow Me: @orionsweb