WordPress.com is a fantastic tool that is widely used and as of writing there was over 63 million WordPress sites in the world, which is almost half of the websites in existence.
WordPress.com completely eradicates the previous barriers of entry into creating your own website. While not the first hosted blogging platform (One of the earliest popular solutions was Blogger) it has rapidly become the easiest to use and the most widely used too.
One important thing for anyone running a website is Search Engine Optimization, whether they know so or not. Thankfully WordPress.com takes out most of the difficult things about Search Engine Optimization and does it all for you. Of course it doesn’t do everything and their some great posts about improving your sites SEO, with my favorite being Ravidreams post on WordPress.com SEO.
WordPress.com is a Page Rank 9 website (With 10 being the highest possible page rank, only obtained by very few websites) which dramatically increases how their pages are ranked in search engines. But how does this effect your WordPress.com subdomain sites ranking?
Back in 2007 Google changed how they treated Subdomains, making subdomains treated very differently. To really understand how it works i suggest you read the post linked above, as they explain it much better then i ever could.
But what does this mean for WordPress.com? Not a lot probably. More likely then not Google treads WordPress.com subdomains differently then all other sites due to their size and the huge volume of subdomains hosted their. WordPress has always had an issue with spam blogs being created and Google would not what those sites to be ranked highly just for being hosted at WordPress.com
So what can you do about this? What you always do about SEO. Post high quality content regularly, get lots of quality inbound links, and over time your page ranking will improve.