WordPress.com is the top level domain here. All free WordPress.com blogs are free hosted blogs on .wordpress.com sub domains.
If you want to change the blog address ie. the URL starting with http:// then you must be logged in as Admin under the exact same username account that registered the blog to do that and the URL you desire must be available. If so then you can change the URL by using this guide http://en.support.wordpress.com/changing-blog-address/
Dashboard > Store > My Upgrades is where you do the primary blog set up knowing it can take between 24 – 72 hours for domain name propagation to take place throughout the internet. You can view the DNS changes here > http://www.whatsmydns.net/ What’s important during that stage is to be patient.
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