You do not need a custom design upgrade to create a custom menu. Staff have provided help for those who want to structure their blog like a website. > http://en.support.wordpress.com/using-wordpress-to-create-a-website/
What’s critical is:
(1) a clear comprehension of the differences between pages and posts > http://en.support.wordpress.com/post-vs-page/
(2) a clear comprehension of the fact that here is only one dynamic page in a blog for posts and we cannot post to more than that one page. But we can create the appearance that we have posted to more than one page.
We organize our posts by assigning Categories to them. When we publish a post it automatically appears on the running page for posts and also on the Categories pages and Archives pages. Note: There must be one published post in each Category in order for there to be anything to display.
A custom menu allows you to display Categories in tabs along the horizontal navigation where normally only Pages tabs are displayed. If you wish you can also include Pages and custom links in your custom menu as well.
These are the how-to instructions:
How to create Pages > http://en.support.wordpress.com/pages/
How to create a custom menu. http://en.support.wordpress.com/menus/