In the past, if you wanted your Blogger blog to use a custom domain, you had to choose the FTP publishing method, which meant you couldn't take advantage of the new features offered by the updated Blogger.
Now, you can have the best of both worlds! All you need to do is register a domain, then go to the Blogger dashboard settings and select "Publish" - switch to a custom domain.
Google will continue to store your posts and images, and the old blogspot.com address will redirect to your new domain. Your traffic and PR value will also be retained.
Although Blogger isn't yet part of the Google Apps for Your Domain program, it's only a matter of time before that happens.