Hey Ross,
As Pedro says, keep the blog on the same domain (in a subfolder). Sub-domains are treated as separate websites as far as search engines treat them so probably wont be as good for the sites SEO kudos.
It's easy enough to add a blog to a domain but not have is within the same CMS. (An apache rule can handle this easily)
Best bet to get traffic through to the blog is to utilise the newsletter traffic; send views from the newsletter whenever possible to articles within the blog content. EG: Blurb about content in the newsletter but to read the article, click thorugh to the blog post. This way the newsletter doesn't contain all the key wood and info richness. It raises awareness of the blog to newsletter recipients and ensures traffic initially while the blog finds its feet.
As for the blogger/wordpress.com i'd lean towards not going down that path so much. Not haing the content on your domain doesnt give you all the link juice/keyword kudos. Linking from the site to yours (and vice versa) might help a bit, but not as much as having the content under your domain. If you set up both, then you've got both a maintenance and a duplicate content issue.
Share the blog posts socially (if viable).
Hope that helps a little. Good luck.