Is it better to have -http://blog.mydomain.com or blog on wordpress with links to mydomain?

My recommendation is to do both.

Have your main site as http://blog.mydomain.com then put some content on a wordpress blog that links back to your main site.

The reason for having a main site is that there is much more flexibility with running your own domain. You can add directories, unique pages, job boards anything you like. The wordpress accounts are limited to blogs and there are some limitations regarding the plugins and content you can deploy.

A good idea is to have the wordpress blog display the rss feed of your main blog. You can do this for many sites. So when you post on the main site there are backlinks automatically displayed back to your main site.

Hope this helps

Well, the suggestion above to create a 2nd blog showing the RSS feed of the first will create duplicate content issues. Plus, the 2nd blog will never get enough trust/authority to have those links be of any value.

I actually just answered this question in an interview that the RSS Pieces web site did of me:

http://www.rsspieces.com/2007/08/14/what-are-search-engine-firendly-urls-and-permalinks-for-real-estate-blogs

In a nutshell, here's are the options ranked in order:

Best: http://www.domain.com/blog/
Next-best: http://blog.domain.com/
If you must: http://www.newdomain.com/

The main point is that the 1st option will mean your main web site benefits from the inbound links your blog gets, as well as the fresh content your blog generates. If you'd like to read more, feel free to check out the interview.

Hi,

Here's my preferences:

1) http://www.mydomain.com/blog - wordpress installed on site
2) blog.mydomain.com - wordpress installed on site
3) http://www.mydomain.com - using wordpress.com to host mydomain.com

For SEO, I believe the 1st is the best, unless you're doing multiple blogs, in which case 2 is probably better (especially if they're prolific bloggers).

The reason it might not be good to host the content on wordpress.com is that if at a later stage you need to move the blog and you own the domain it's on, then you can do a simple 301 http redirect to it's new location. If you DON'T own the domain it's on (i.e. if it's at oops.wordpress.com) then you've lost all your valuable links.

If you need clarification I think you can send me a question on here, otherwise my blog is linked below - check out the comments section which may answer a couple of things too.