Microsoft's Live Writer Beta is a windows application and so is restricted to use on a Windows PC. Google's tool is a web based application that will work in Firefox or Internet Explorer. For Mac users you will find that Camino is supported but not Safari at the present time. As Davis Janowski points out in his analysis, the blogger tool only supports publishing to the blogger platform, and to the beta platform at that.
What Davis overlooked is that Google now offers an alternative platform for blogging - Writely.
As demonstration I have written and posted this blog using Writely.
The first step was to write the blog.
After the writing the next step is to preview how it looks prior to posting.
Since I haven't posted to Blogger with Writely before the next step is to preview my publishing settings.
Take note that Writely not only supports Blogger and custom servers
via the Blogger, MetaWeblog and MoveableType APIs but it also supports six hosted providers including LiveJournal and WordPress.
The Writely editor lets you perform WYSIWYG editing as well as switching to HTML mode to tweak the underlying code. It is an impressive and easy to use cross-platform blogging tool. Take a look - you can sign up at www.writely.com. For Mac OS X users it is worth serious consideration even though support does not extend to OS X's native safari browser.
Update: I checked out the Writely Support forums and it appears that the upload problem was a temporary problem. I am including a snapshot from the Google Groups page as a test to see if image upload will work this time.
If the image upload works then Writely is a very cool blogging tool.