Time to get started!
Okay, hopefully after reading my last Blogging 101 post, you have a set of keywords to target, have picked the best revenue channels to monetize your blog, and maybe even written a couple articles. All that's missing is an actual website. There are dozens of platforms you could build your blog on, from Wordpress.com, to Blogger, to self-hosting a Drupal, Joomla, or ExpressionEngine install. If you want to make money from your blog, DO NOT USE Wordpress.com (.org is the self-hosted download). Here's why:
Adsense, Yahoo, Chitika, TextLinkAds and other ads are not allowed on free WordPress.com blogs... In addition to AdSense-type ads, please do not use the following services on your blog: sponsored / paid posts including PayPerPost, ReviewMe, and Smorty; affiliate / referral links to the following domains: usercash, clickbank, clickhop, cashrocks, payingcash; clicktrackers (and any similar) and any promotion of the “I made a million on the internet and so can you” type of advertising (i.e. MLM, network marketing, cash gifting, etc.). Paid or sponsored post content is also prohibited.
I can't speak for Blogger or other services, but I imagine their terms are the same. Even if the don't prohibit ads now, it doesn't mean they won't in the future. By chaining yourself to a service, you'll have to abide by their rules as long as you keep using their service. You will also be limited in which plugins you can install. Transferring to your own host isn't impossible, but it can be a lot of work to update your URLs and any images you've uploaded. Skip the regrets by learning how to setup your own domain and hosting.
Ultimately the best and most recommended solution is a self-hosted Wordpress site. The benefits of Wordpress are many: 5 minute install, easy to use control panel, thousands of themes, plugins and tutorials. Trust me, unless you're an expert web developer, and even if you are, you'll be stepping into the wild if you build your blog on anything BUT Wordpress.
Okay, so, Wordpress. What now?
1. Get a domain, through something like Namecheap and get some hosting. There are lots of reliable hosts with dirt cheap pricing. You do not need to pay a premium for hosting. I wouldn't spend more than \$10/month and that might be pushing it. Personally I like Lithium, but I've also used apis networks and they were fine. Whichever you pick, start with the lowest price and work your way up as you need more bandwidth.
2. Install Wordpress, theme, plugins, and setup your pages and initial posts. Here's a list of recommended plugins. At the very least I suggest installing Wordpress SEO (by Yoast) or anything that lets you set meta values and create an XML sitemap.
3. Setup Google Analytics, Google Webmaster Tools, register your sitemap with Google, Bing, and Yahoo.
What's the best theme?
There is no best theme. There are literally thousands of very good choices and as long as you are in control of your sitemaps, your heading tags, and your URLs, it will be hard to go wrong. I would always suggest you pay for a theme from a reputable site like ThemeForest, Mojo Themes, or Woothemes and not by Googling "free Wordpress theme". Why? Because half the time (or more) those "free" themes have hidden backlinks or other malicious code. Not to mention the quality of the design will almost always be lower and your blog will look like a cookie cutter, spammy blog.
A professional, well designed theme typically runs \$35. I always count this cost as part of the required blog investment along with domain name and hosting. Don't skimp.
If you want a more detailed guide on how to setup everything for Wordpress, including detail on most of the steps I've outline above, I highly recommend this post: A Comprehensive Checklist To Creating The Perfect WordPress Website