website > blog in every aspect if it's a business...blogs scream unprofessional to me as a place of business...if I'm looking for a product or service, and my choice is between someone who runs a blog only, or someone who has a business website....all else being equal, I'll be going with the website every time.
to me a blog is a place to keep just a log of quick thoughts and ideas you want to share (IMO facebook is just a collection of people's blogs in one spot)....things like 'I ate a steak the size of a toilet seat' belong on a blog, things like products and services NEED a website. even if a blog is well put together, and professionally presented, the overall blog format isn't a productive format to conduct business in...
however, supplementing a website with a blog would be good thing for a business to maintain customer interest, loyalty, word of mouth, etc...your website should show off your product (in the case of photography, your portfolio), costs, who you are, provide information on doing business, and how people can contact you, and the other aspects of your business....the blog should have your personal thoughts on a shoot, new equipment, or anything personal that doesn't specifically affect how the business is operated...
take your friend's blog, its well put together, the images are good, but if I'm a client trying to find a photographer, his site just looks like a personal blog if the time isn't taken to examine everything he writes, he has no obvious link to pricing structures, no straight forward portfolio (his link says 'lifestyle portraits', what is that? is that his portfolio or is it just a title for a blog post about how he likes to take portraits of people's lifestyle and share them, etc)...you have to comb through the page text to find the vital information that should be front and center....etc....just little things like that.
a business should have a site that undoubtedly conveys a professional and succinct atmosphere. a blog doesn't do any of that as a primary page to bring in clients.
thats my thoughts at least...
as far as SEO, there's MUCH more to it than having a blog, if you put the work into optimizing a website, it can be much more SEO friendly than a blog. but the tiny SEO difference between a blog and website (properly done) isn't anything to worry about. go after advertizing, get people searching specifically for YOU, not worrying about if people can haphazardly find your site in random internet searches.
hope that helps, best of luck! you should post a link of your site when you get it built so we can see how it came out. (plus that'll help with your SEO)