According to Matt Cutts

I have Matt Cutt's blog in my Google reader. He is not an official spokesman for Google. But I think of him that way. He recently went over how to do SEO for blogs there. I ate the stuff up. Here is a summary.

You should name the directory on your server which hosts blog information "blog". Make sure you place your keywords in the URLs you use. Dashes in the URLs are the best way to separate words.

Make sure you have alt tags for images. You should also make it easy for the post creation dates to be seen. Creativity in the content is important. You might also consider stirring up some controversy. And as always, you can't lose if you make lists. I should take Matt up on some of this advice.