Nope, it does not. I have just completed four months of research and analysis in preparation for the launch of my newest white paper, “The Tangible Benefits of Blogging”, and found that really the set up is not important.
What is important to search engines is your content and keywords. Whether you use Blogger’s custom FTP blogging or Blogspot with a custom domain, the difference is nearly moot.
Now, there are real reasons why you would want to use custom FTP blogging and real reasons why you would want to use Blogspot, but now you do not have to choose one over the other for real benefits on search engines.
In fact we have found on a head to head comparison of our two blogs, Web-World Watch (custom FTP blog) and Blog-World Watch (Blogspot custom domain blog) that sometimes the post on the Blogspot blog actually appeared in a higher position in the SERPs than our custom FTP blog.
I’ll let you know when I publish my white paper, if you are blogging for search engine and traffic benefits, you will find the paper and case studies very interesting.