A few years ago, both WordPress and TypePad made it easy to use their plaforms as a website as well as a blog. As a result, Wordpress has become the favorite way to quickly build a website. Google has also changed the way they calculates a site's authority so that a co-located blog and website each can benefit from each other's authority.
There are good reasons for having your blog separate (on a different domain) though. If you anticipate that changes in the market will cause a shift in your business to the point where a new website and new domain name are called for, the separate blog makes sense.
For example, we're about to launch a new website on a new dmain name. We're also po=utting together several tool-specific websites (the tools being facebook, twitter, linkedIn, etc) I really don't want to maintain a separate blog for each of those websites. One blog covering all the topics makes better sense.