In (X)HTML, there are several levels of headings. You have h1, h2, h3, h4, and so on. The proper way to use them is in a structural manner, a post title having a lower number (e.g. h1) than subheaders in a posts content, which would be the next one down (and then subheadings below that would be h3).
Search engines are very big on the h-tags, treating content in h1s and h2s as more important than most other text.
The question is, where should that structure start? Information on the semantics of heading tags is very mixed, and can be hard to sort through.
Some say that a blog’s post titles should be h1s, while others say that a blog’s name should be an h1 (though that assumes that you’re using plain text instead of a logo). Some say that there should only be one h1 tag on a page, which I think is a safe practice SEO-wise. (Google has been known to frown upon sites that make excessive use of h1s, considering the emphasis the search giant places upon them.)
Here’s the best way to handle headings on blogs:
On the index and archive pages, h2 tags should be used for post titles. On permalink pages, use h1 instead. You can then use h2s, h3s, etc in your post content, for subheadings. I suppose an h2 would work for the “x Comments” and “Leave a Comment” messages as well.
I’m not sure about sidebar headers though. They would best be h3s, or possibly just stylized bold tags…
Well, those are my suggestions, for the average blog, feel free to deviate from them as you see fit. At any rate, don’t let the size of the elements have any role in your decisions. Use CSS to make them the sizes you want.
EDIT: Devlounge has posted a response to this post with some good discussion going on.