Google introduced a new type of verification for Google Sitemaps: insert a meta tag in to the homepage of your site. The previous method (uploading a file to the server root) didn't work for Blogger users that host their blogs on BlogSpot.com.
You don't have to submit a sitemap for your site to use Google Sitemaps. If you prove you're the owner of the site (using the methods above), you can find interesting information: the top search queries - the queries that most often return pages from your site, top search query clicks - the top queries that direct traffic to your site, crawl statistics, PageRank distribution, crawl errors (this is a good way to detect bad links, HTTP errors).
If you have a blog on Blogger and can't host a sitemap for your blog, you can just submit your blog's feed to Google Sitemaps: http://yourblog.blogspot.com/atom.xml.
A simple way to create a sitemap for your site online is using ROR Sitemap Generator. If you want to have a sitemap that updates dynamically, you have to install a web application on your server (PHP, ASP, ColdFusion).
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