Bigsend:
You can't forward live.com domains unless you are actually have a forwarding script on the live.com blog page that causes people to hit your cool domain at live and automatically leave it for a less cool blogspot domain to read your actual content.
It's worth the $7 a month. If you're worried about $7 a month (less than a movie these days) then you're probably not really serious about a blog. Because, in the end the $7 a month will make you go with it or shut it down.