You can have WordPress.com host your blog, or you can host it yourself like I do. A blog hosted at WordPress.com is a free blog and you cannot run plugins there.
The WordPress blogging platform is free to use and you can install it anywhere. All you need is a domain and a machine to host it on.
As far as what's in it for you, every time an ad is shown on HubPages, you are sharing the traffic with HubPages. For my personally hosted blog, I get all the traffic. I don't share it with anyone. My blog is small, I get around 1000 unique visitors a month and I get a modest amount of money for the ad traffic there. If you have anymore questions about self hosting or WordPress please let me know.