With Rich Editing in BlogThis!, Google has taken a good step towards the slicker editing UIs recently available from WordPress (in 2.0) and MovableType, and longer from the various third party blog writing apps like Ecto and w.bloggar.
The one significant criticism I have is that the text field opens with the underlying page hyperlinked in it but any text one types (before or after it) is included in the hyperlinked text. The cursor should absolutely be outside the hyperlinked page title. A second problem is that sometimes the edit field appears to lose its place and I need to use the mouse to click somewhere to get back to work.
Overall, nice job Blogger team! Now where are those categories, trackbacks, and export and import 😉