I have just recently downloaded Windows Liver Writer Beta (http://get.live.com/betas/home), and have used it to create my previous blog post. The tool is very simple to use, and the best part about it is that it can be used to post entries to a MOSS hosted Blog site. And it Just Works, with proper in context previous, categories, uploading of images in the post and more!!! The screen shots below how simple it is to setup:
Step 1: Choose SharePoint as the blog destination (other than Windows Live Space or Other)
Step 2: Specify the path the SharePoint Blog site where blog posts should be created
Step 3: Configure the authentication mechanism
Step 4: Create your blog post, preview it (this is really cool, check the image below of this blog post) and then hit "Publish"