Yes, unfortunately. I would not recommend NukePress. The blog was completely uncustomizable and had a few small errors (like their RSS feed contained HTML characters in it). I sent a support ticket out, and they told me that it was a known issue that would be fixed in the next release.
I would completely recommend Ventrian News Articles.
- You can allow a group of users to post to a blog. You can even create a blogger role that will expire after a certain period of time. With the blogger role, you can set custom restrictions such as not allowing the blogger role to attach files to his/her posts, etc.
- You can change the template to include Advertisement between the posts. There is even an interface that comes with the module that allows you to change the basic HTML and include tokens specific to the blog (like comment count). The only issue is that the posts are grouped by views. So for example, if you wanted to change the way that the posts were displayed in the archive listing, that change would also affect the way the posts looked in the normal listing; however, that change would NOT affect the way the post would look in the post/comments view.
- Users are able to be notified (by email) when someone posts a new comment after they have commented. The only thing that I notice about our instance of Ventrian News Articles is that it appears they would only be able to register with Microsoft Outlook (or Live Bookmarks, Google Reader, My Yahoo, Blogliness, or a desktop application). We connected our main RSS feed to Feedburner. This allowed our users to register to our MAIN RSS feed by Gmail and Yahoo mail.
- I'm not sure about SEO optimization...I think it works fine. We currently have a live website that is pretty much just the blog (actually it is just a blog...). Just now I searched for my bosses name attached with 2 keywords and our website appeared in the google listing. When I clicked on the listing, a page with the title 'Entries for 'Steve Wilson'' appeared. That's pretty good, right

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- It does have full trackback
- I can't remember if it integrates with Microsoft LiveWriter or not, but I really need to get going, so...hopefully someone else can answer that question for you.
I'm sure Engage Publish has more features, but Ventrian really gives you a bang for your buck -- only $30. Plus, you get access to Ventrian's forums for help and all of Ventrian's modules (they have a few other cool ones).