Just figured this one out as well.
1. Set the custom structure to: /blog/%year%/%monthnum%/%postname%/
2. Create a category called "Blog". Add any other categories you wish and make them a child of "Blog"
3. Assign your posts to as many categories as you want always making sure that "Blog" category is selected also.
4. Withinn your custom menu, add the category of "Blog"
5. Download, install & activate a plugin called "FV Top Level Categories" (3.1) or "Top Level categories" (3 and below). Or alternatively, create a function that removes the top level category.
And you are done. Clicking on the nav menu called "Blog" will take you posts homepage:
The post page will be structured as:
The category page will be structured as:
Archives will be structured as:
Author will be structured as:
Tags will be structured as:
Hope this helps anyone who needs it.