I've never seen it before, but it could very well be a multi-user WordPress site that someone has set up with free sites. They'll make their money thru advertising on your blog.
I wrote an article not long ago that includes some of the advantages and disadvantages of using the free ones.
http://rightbrainleftturn.com/wordpress-websites-for-designers/One thing I didn't see in Blog.com's TOS is a mention of backups - can you back up all the stuff you write? If you can, then it's a good option if you need free. If not, then it's got an added risk.
Not sure why I couldn't get your link to open in a new window. It opened right here in the forum which I've never seen before. It looks like they have some nice themes.