There are a lot of ways to display the latest blog post. They’re all complicated and ugly. I made a very simple WordPress plugin to handle this. It has no settings or options.
All you do is stick
[get_latest_post] where you want the post to go.
You get markup like this, which you can style as you please:
<p class='title'><a href='http://www.mysite.ca/blog/post'>Look ma, no hands!</a></p>
<p class='excerpt'>Today I rode a bicycle … <a href="http://www.mysite.ca/blog/post">Continue reading <span class="meta-nav">→</span></a></p>