But if it's just blogging, why wouldn't they just pick up
iBlog? I mean, they even distributed that little app for free once upon a time to .Mac members.
No, if they're really going to do a web page creation tool, it has to be more of a ripoff (we all know Apple's not above that) of
RapidWeaver that easily ties into the other iLife apps. Basically, the .Mac HomePage site, but a local application instead of web-based wizards. Ties into iPhoto for publishing a gallery, iMovie for videos, and GarageBand for podcasts. Like Keynote or iDVD, it would have professionally designed templates for your use, or you can design your own from scratch.
Edit: Seems like a couple of others said basically the same thing while I was typing. But integrating it with .Mac groups, and adding some kind of social networking / P2P functions could make it a very powerful tool.