WordPress offers two versions of its popular blogging application. If you want a free blogging application and don't want to have to pay for hosting or worry about technical issues, then sign up for an account at WordPress.com and start your free WordPress-hosted blog immediately. However, with simplicity comes limited features.
If you want a free blogging application that gives you maximum control and functionality, and you don't mind paying a third party to host your content or dealing with technical issues, then visit Wordpress.org to download the self-hosted Wordpress application (most web hosts offer one-click installation of WordPress, so you don't have to worry about downloading it and manually installing it to your hosting account).
If you're okay with limited features and don't want to deal with anything technical, WordPress.com is the way to go. However, as your blog grows, you might find that you want or need additional features. For example, you might want to get a custom domain name or sell ad space to make money. Here's where things get a bit more complicated.
WordPress.com users can pay for a variety of upgrades, so they can get access to some of the popular features that WordPress.org bloggers use. However, even the available upgrades are limited in comparison to what WordPress.org users can do with their sites.
Make Your Decision Early
You should make the decision between WordPress.com and WordPress.org as soon as possible. That's because switching to WordPress.org from WordPress.com requires you to purchase your own domain, which means you'll lose all of your blog's search engine traffic, incoming links, bookmarks, and so on. Your blog's RSS feed URL will also change. In other words, you can switch from one application to another in the future, but doing so can cause some problems.
The Testing Period
If you're new to blogging, start a test blog on WordPress.com and pick up a book about WordPress, so you can play around with the available features. You can make this blog private and delete it later if you want to. Get comfortable with WordPress before you make your final decision and start your real blog.
Once you understand how WordPress.com works and determine if you enjoy blogging enough to start your real blog, then you can decide whether WordPress.com will be adequate to meet your long-term blogging goals or if you'll need to switch to WordPress.org.
The Final Decision
If you're serious about blogging and have goals to grow your blog audience or make money from it, then you need to use WordPress.org. Don't be intimidated by starting a self-hosted WordPress blog. If you spent time learning how to use WordPress during the testing period described above, then you already know how to use the WordPress application. Now, you just need to get a hosting account, register a domain name, and install WordPress. Fortunately, most web hosts allow users to install WordPress using an easy-to-use tool like SimpleScripts, so the process is as simple as pointing and clicking through some onscreen steps.
Bottom-line, it's cheaper in the long-run to self-host your WordPress blog than it is to pay for WordPress.com upgrades. You also get more functionality, greater customization, and complete control with WordPress.org. If your blogging goals involve anything more than blogging as a hobby and your objectives include growing your audience, making money, or opening the doors to new opportunities, then WordPress.org is the best choice.