Subdomains vs multiple domain names
I would go with the third option. It'll give you lots of flexibility as you could move one blog to another hosting company if needed. Or if one blog got very popular you could move it to a farm of servers without effecting the other blog, and your main site.
As for JamieLewis stating that sub domains are only for services, sub domains can be used for whatever the owner likes. If you think or the blogs as an application, then each one should qualify as its own sub domain even under his rules.
I use the third method (sub-domains). I use Zone Edit to control the sub domains. Personally I think I this is a clearer definition of the different zones
I wouldn't use the extra domain as this is more expense and just clouds your domain and doesn't give you any specific single point for your identification.
The first option can give you very long and unmemorable names.
Google will generally treat subdomains as separate sites for ranking purposes.
The shouldn't be any cost in getting xxx.yourdomain and yyy.yourdomain setup. If there is, get a new webhost!
The best option seems to be the third one. The first is fine, but you'll end up with some huge urls.
The third option is your best choice as has been said. The problem with going with the option and switching later is you're not going to have a straight DNS solution to distribute the load/redirect the user. You're going to have to accept the incoming response and the web server is going to have to redirect using a 302 Response. So what that means is the initial name is still going to take some of the traffic in order to do the redirect. So if you're looking to potentially spread out later, this isn't the way to go.
If you go with option 3, you can have different A records all pointing to the same IP address. And then the server, using host headers in the HTTP REQUEST, knows which web application to direct to. Later, as you split apart, the A record will point to a new IP address (a new server) and you are able to distribute the load / redirect services without impact to the initial set of servers.