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Actually it's a bit more complex than Rafi explains. If the main site is an ecommerce site (sells products), it's okay to have the blog on the main site unless you end up with a high volume of content on the blog that can weaken the "purchase" intent of the main site.  In that case, the blog on a sub-domain is actually somewhat better because it separates the "informational" intent out and can in turn build up a stronger authority signal as "informational" as a sub-domain.  But only if you drive a lot of traffic, engagement and links to the sub-domain. If the topic is isolated to a niche topic not generally strong on the main site, that's another valuable reason for the sub-domain path. Again, by isolating it within a sub-domain you're preventing dilution of the topical focus of the main site.  That also applies if you have products or services that you can build up enough content within that niche to justify an entire sub-domain. If the main site is informational and the blog is informational, and there is a lot of cross-topical relationshps, it's best to keep the blog as a folder/directory within the main site - in this scenario you get more value by going this route because of the commonality of intent and topical focus.

Perfect, I really appreciate the response.

That was a great post inhouse....  if you add a little more it might make a good youmoz post.