How to use custom domain for your blog and why?

As I mentioned in my previous post - 'How to create your first blog for free?' that there are two options in blogger to publish your blog. – You can host your blog using blog spot domain [Example – blogname.blogspot.com] or your custom domain [www.blogname.com]. You can change the domain options whenever you need without losing your data from blogger, however it’s better to decide from the beginning for search engine optimizations.