There really isn't a difference between an LJ and a blog. Some weblogs are topical and discuss current events, while others are more diary-like. But I've seen some LJs that are more "blog like". *shrug*
ETA: The biggest difference I can think of between the two is that the thing that makes LJ so great is the community that builds up around the system. You can find lots of people that share your interests very easily - that's a little difficult to do with self-hosted weblogs.
The technical difference might be the features you'd get with each service, but for someone who doesn't want to mess around with all the technical mumbo jumbo, an LJ would work just fine.
Oh, and I hope Six Apart makes the LJ network more stable, but to do that I fear that all of the free accounts will become a thing of the past.
