Recently a friend of mine asked me take a look at the problem. She have a blogger blog for a while now. Then she bought a domain name from Google and set it with Google API. And the whole thing wasn't working properly. She asked me for little help, and after spending several hours I found this solution.

* If you buy a domain from Google set with Google Apps they would set the DNS, MS and some other data for you. As a result your domain would point to the Google Apps webpages. Of course you don't want the domain point to Google Apps website.

So first thing to do is disable the web  pages from Google Apps.

* Then login to your blogger account.

Click on Settings for you blog.

Click on Publishing. 

Click on Use Custom Domain. By default you will see the Buy Domain option. On the right side of it you will see the"Switch to Advanced Settings"; click on it.

Enter your domain name there and save.

Thats it.