Blog Address: Directory or Domain?

Recently I fielded an emailed question from a reader as to which is better home for a blog: as part of the company web site (www.company.com/blog/) or as a separate domain (www.companyblog.com)?

AdSense.com Rejected By AdSense

Confusion over Google's advertising network and an Oregon-based marketing firm has left the latter dealing with lots of calls and emails for AdSense support.