Domains come cheap and there are many registrars available. ZDnet, Unitechost, Net4, Softcell, etc... there are a lot more...
Yes, having your own domain does help at times. Techincally, when you are hosted at a sub domain, PR of the main domain is important. So, blogger may have a good PR, but the fact that you have too many sub domains on blogger plays down and your search visibility depends on Keywords and other optimization you can do. Link back from good PR websites always help and you dont have any limitations, your sub domain gets the PR and adds more importance to your main domain.
Having your own domain gives your blog an identity. Another factor is domain extension. For example, my website is www.hemalshah.net and if you search hemal shah on Google, you will find my link on 3 or 4th. However, there is a domain which is hemalshah.com and it gains importance because it is a dot com domain as opposed to dot net domain I have. When I gain a page rank over his website then I would be able to move above a .com domain. If we both have same PR, .com domain will supersede a .net domain.
So, choosing a domain extension is as important as choosing your domain name. If you have an option of dot com, go for dot com domain. This is because a majority of Fan sites or similar named firms do not get a dot com domain since it is booked by the individual / firm already.
The regional domains like .in, .ru, .us, .uk etc are optimized for country searches. In Google, you have an option to search for pages in India. This is where your domain gains advantage if you have a .in domain.