Google Blogger users can now switch over their blog from a blogspot.com subdomain to a personal top level domain (TLD) name like xyz.com with the blog content still being hosted free of cost by Google.
Custom Domains for Google Blogger is available with the new Blogger service which just got out of Beta. As previously mentioned, you can continue to host content as well as photos/pictures on Blogger Images or Picasa web albums.

Here’s a step by step on how to go about switching your Google Blogger blog to a top level domain:

1) The first thing you’ll need to do is to choose a domain name, like mysite.com and register it.
2) You will then need to create a CNAME record for your domain with the DNS, associating your domain with ghs.google.com with your domain registrar
3) Then goto Settings–>Publishing tab in your blog settings and select “Switch To:Custom Domain

Via Google Blogger blog