Well, this does come out after I needed a good Blogger app, but at least it is out!
Blogger on iTunes
Overall it looks great and syncs with the web version. As I'm writing this post I see this post as a draft on my Blogger app.
The post interface itself has all that you need. Location services, inserting images from your Camera Roll, or new pictures just taken.
I don't see an option to format your text though.
Anyway, it's about time!