You won't benefit from the PR because they won't be linking to the subdomain.

If you could somehow get them to link to your subdomain from the main site, you would benefit.

Host your own WP install. Wordpress.com won't let you monetize it. Their moderators move quickly.

Synnuh got it right. Sub domains are completely separate sites in the first place, and even pages only get authority if they're linked. Some try to build low-quality links to their WP.com sites, something they would not do with their money site.

If you're just starting a blog WordPress.com is fine, and allows fairly easy migration to the .org version. Just remember to use your own domain name.

Wordpress.org is only used if you are wanting to download and put it on your hosting. Most people would download the script from Wordpress.org and put it on their domain XYZ.com...They could then also go to Wordpress.com and signup for a free site (hosted on wordpress' end).. You would have 2 wordpress sites - but one would be hosted on the Wordpress server while you would be hosting the other.