I'm using a Goggle blog for another project and overall it works fine, no complaints. I've also switched to using Live Writer for blogging, my typing is bad enough that a spell checker is a must (and grammar checker would be a nice addition). Today I was doing a post that included an image, easy enough in LW, just paste it in. When I tried to publish the post it told me I had to log in to Picassa so that I'd have a place for the images. I did that, but not thrilled with that implementation. Why do I need another step other than to drive traffic to another Google site? I just want to upload the image, and if I want to change it, I want to edit the post and change it. I get that the images can be stored anywhere (including Picassa) but it just seems like a bad model, having posts in one place and images in the other. Hide it from me, let me manage it using standard tools, all is good.
Images are always the pain point for these types of applications. Doesn't matter to me if the files are in the file system or a table (though I lean towards tables for DR and security), just make it seamless. LW does its part, Google just tweaked me enough to want to write something down about it!