The biggest difference between the two is one is Dynamic and the other is Static. I think you can guess which is which.

Blogging is the Dynamic choice for someone who has something to say, sell or portray. Once you start a Blog it is best to try to update it every day. That way you can build a readership and potential customers since that should be your objective. You want to keep to the subject matter as much as possible. Put a link to anything you find that is pertinent to your content (just don't over do it). If you DO have a Website, make sure to put a link to it in an accessible spot on the Blog so that people can see your main products and services.

A Website is Static. This is where you actually describe your products and/or services. You can update a website as often as you like, but this is usually only done if your products change, you have a Sale, or something of that nature. You should have a link to your Blog on this site to allow customers to get updates as often as you post them.