I gave you an incomplete answer... so let's try this instead (sorry for any confusion)!
According to the boards here, the blog module is sometimes having an issue with certain servers, especially when going Live (just what everyone wants!), so I've found this combination to work well:
Try this first:
1. Adjust the BlogEntry.ss file in your /<theme>_blog/templates/Layout folder where it says <p>$Content.Parse(BBCodeParser)</p>. Change this line to:
Then flush the cache and reload...
If that doesn't work, then try removing the bbcode calls:
1. Gather the latest blog module build tarball from [url=http://dailybuilds.silverstripe.com/modules-tarballs/]Daily Builds[/url] so you can set up wysiwyg editing.
2. Put this in your _config.php file:
3. Adjust the BlogEntry.ss file in your themes folder as described above. You should also remove the <p> tags. Be sure (again) to flush the cache.
Let us know how that works out for you. Hope it helps!