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You build your main blogs on your own domains/hosts and you also build yourself an inbound link farm (and additional revenue stream) on a bunch of the free hosted blog sites to support your main blogs.
Just like everything else, you spread them around to minimize risk. You also ensure you have copies of the blog posts and images etc. so that if a host goes down you can very quickly duplicate it on a different host.
You can also get the same type of thing by building your own "private" multi blog domain on different hosting companies if you're that paranoid.
People who are heavily into SEO utilize a LOT of free hosting services (blogs, sites, articles etc.) out there in order to build up their inbound links.
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