Steve Hooker has a post entitled Microsoft's Spaces: are they blogs?  where he writes

Certainly, they are blogs, at least for Joe Sixpack, but why did they call them 'Spaces'? My guess is that they're going to take them deeper into Microsoft land, and the term 'blog' won't fit later. Already they're locked into MS's instant message app, Messager and their authentication system Passport.

I'm unclear as to why Steve calls the requirement of having a user account to create a Space "lock in" especially since every blog hosting service requires some form of user account be it Xanga, LiveJournal, TypePad, or Blogger. MSN Spaces has the advantage that you can use this same account to access multiple MSN services including MSN Messenger. This is no different than the fact that I have a single login to access all of Yahoo's services.

As to why they are called "spaces" as opposed to "blogs" it is because we believe there is more to sharing one's experiences online than your online journal. People want to share their thoughts, their favorite music, their favorite books, pictures of their loved ones and so on. It isn't just  posting your thoughts and experiences in the reverse chronological order which is what typically defines a "weblog". It's supposed to be a person's personal space online which was the original vision of personal publishing on the Web which spawned the personal homepage revolution a couple of years ago. Weblogs are the next iteration of that vision and we expect MSN Spaces to be the refinement of that iteration.