WordPress directory structure question

Hi,

To start off, I’d like to say that I have been using WP since 1.5 days and I am quite familiar with the method of Giving_WordPress_Its_Own_Directory because that’s the way I have installed all of my WP sites in the past.

However, now I have a problem and would welcome any suggestions others may have. What I would like to have is this:

domain.com/ <– shows a semi-static page as in a WP “page”, perhaps using a home.php
domain.com/blog <– the usual blog portion

I guess for a start I can install WP in domain.com/blog, but how do I go about creating the front page? Or are there any neat tricks I can do by playing with permalinks?

Thanks in advance!