Ok, you can find a lot of information on how to start a blog but in nutshell here's how it works. A blog created by you is your personal property, it works as a website, only the url of the blog which is the link necessarily contains the title of the blog service provider. Let's take google's blog service which is blogger.com, anybody who makes a blog over blogger.com gets the the url as yourblogname.blogspot.com. once you have registered over blogger.com and created the blog with the desired url name you are ready to put your desired content in it, as far as it does not violates the rules of blogger.com. So that was some basic briefing.
Now, lets get a little practical,
1. Registering: you have to register the blog (my advise make it on blogger.com) on any of the topic content of your desire and interest, lets say, on cars information in Pakistan, this requires blog name check, lets say you make it like carsinpakistan.blogspot.com.
2. Publishing: Once the registration process is completed now you are required to put content in your blog, this requires gathering material relevant to your blogs title from different sources (magazines, online sites, personal experiences, friends' opinions, whatever you like). Once your blog has produced a fair amount of content and it also takes about some fair amount of time and work to get your blog in to search engines then you would think of monetizing it there comes
3. Adsense: Once your blog has atleast 50 to 100 posts and a fair amount of traffic (which you will have to generate through different social networking ideas like facebooking etc) and the blog itself has a look and management of being an informative stuff, then you can apply for adsense account (which is also a google production), and once it gets approved, you can put the advertisements provided by adsense on your blog (you can see adsense ads on pakwheels top and bottom)
4. Earning Calculation: This thing is never accurate, you can only have an approximation, lets say your blog is good enough that adsense approves a rate to pay you $1 for a click on the ads and by your traffic generation you manage to get atleast 10 clicks a day so you make $10 a day which is $300 a month and that sums up in Pakistani Currency as $300 x 80RS = 24000RS. Thats it !!
And then once you get in to this kind of a market you will get to know other benefits as well. I advise you to search the net for earning by blogging. One more thing that this is not very easy but at the same time it isn't very hard, currently people are on certain positions which are 100 times better then the calculation i made above but it requires every bit of your time, expertise, capacity of responsibility, concentration, interest and hard work.
I hope this works for you. Hit back for anymore of counselling.
Best of Luck !!