Hi andyah,
The key is in the Module Options action menu item for the view blog module. You'll have to be logged in as admin or host to see it. Under Module Options, you can set the Personal Blog Page property to a specific blog. This limits the blog related info on that page to the blog you've selected.
In order to have multiple blogs, you'll have to have multiple user accounts since there is currently no way to have more than one blog for a user account. If you create another user account which has edit access to the blog modules in a page, trying logging in as this user. You'll see that now you have the ability to create a blog for this account. Same module, but now more than one blog is created. It's when you have more than one blog created that the Personal Blog Page can be useful.
Note also that you can set some blogs as public and some as private, which allows you to have blogs which don't show up in the list of blogs.
HTH and sorry you're having problems with the blog module.
Don