WordPress.com was added to provide a service to those without the technical knowledge and understanding needed to run PHP software. It provided WordPress functionality to those that were stuck on other hosted blog platforms.
WordPress.com also allowed the Automattic team to test new features while controlling the environment of those tests. This has lead to some great features coming out in the self-hosted WordPress.org software.
One of the biggest advantages is that you don’t have to find hosting, deal with server specifications, or even upgrade your WordPress.com blog. It is all dealt with by Automattic. They pre-install many great themes, as well as give you some great statistic software to track what is going on with your blog.
WordPress.com is also the test bed for new features for WordPress, meaning WordPress.com users get cool features that the self-hosted WordPress.org users have to wait a few versions for.
They also have a community feel which is separate from the WordPress.org community, making it feel smaller, though with more than one million WordPress.com blogs, it is still amazingly diverse and interesting.
Unfortunately, WordPress.com is not without its issues, but many bloggers just starting out, won’t see the problem here, and honestly, neither will some higher level bloggers.
You can’t edit themes directly. You can change the cascading style sheets for a yearly fee. Cascading style sheets are a way to control things like what color your headlines are and how your content is displayed. Having this ability is great, but it can still leave you somewhat limited in how your blog can look, and function.
You also can’t have any form of advertising on your WordPress.com blog, meaning no way to monetize the hard work you put into it.
Lastly, if you need more than 100 megabytes of hosting space, a real domain, rather than being hosted on a WordPress.com sub-domain, custom cascading style sheets, for a custom design, or more than thirty-five private users, you will have to pay a fee. If you want all of these things, that fee can be a fair bit higher than you’d pay for hosting and a domain from a third party.
It really comes down to what you need, what your expertise is, and what you are willing to pay. For the starting blogger, a free WordPress.com blog has more than enough features. Never needing to go through the upgrade process, while fairly simple on WordPress.org blogs, is also provides some great peace of mind.
I can’t say that power users won’t like WordPress.com, as I have seen many happy with the service, but I think that most power users that know how to FTP, and want more flexibility with their blog will want to stick with the hugely expandable WordPress.org software.