It seems that if you're looking at boosting the web traffic on your main site, your corporate blog should be an extension of your site (eg: www.cnn.com/blog). However, if you're looking to change the focus of your main site, you may want to consider a blog with its own domain. For example, if your blog is focusing more on your industry then what your company does, you may want to appear as more of an "independent expert" or "trusted advisor". This is difficult to do but typically looks better when you don't paste your logo all over your blog.
I think this debate will continue for a while but thanks Mark for the great post!