I can't believe I'm the first person to want to do this...
I've installed WordPress in the root of my new domain and set up the posts to show in the blog folder by adding the path /blog/%postname%/ to the permalinks settings, which worked fine.
Ideally, I'd like to add a link to /blog/ to the main navigation alongside the top level pages and I'd end up with a proper website structure based upon WordPress.
The problem is that /blog/ currently gives a 404 error message and you have to type in a full post url /blog/postname/ to make it work.
Can anybody suggest a solution please?