Jason Shellen, associate program manager at Blogger, is delivering a keynote here in Boston. He's just made very clear what some of us already knew: any suggestions that Google will remove blogs from its main index is simply not true. "We are not removing blogs from Google," he said. Doesn't get any clearer than that.
What Google is going to do, btw, is create a weblog search tab, in the same way they do specialised searches of newsgroups, shopping sites and so on (Update: Jason fact checks my ass in the comments box attached: not a search tab, something else :-)). There are some semantic arguments to be had about what goes in that blog search, but they appear to be working on that...