Update: Rebecca McKinnon writes that
Microsoft has launched a Chinese-language version of its Spaces blog hosting service, and guess what? Users are banned from using the word “democracy” and other politically sensitive words to label their blogs - although it does appear possible to use those words within blog posts, for now. (As noted in my interview with Isaac Mao, people who set up blogs under this service don’t have to register with the authorities because MSN is already obliging the government by policing their content.) But then, MSN is already in the censorship game even in the U.S., as Boing Boing discovered soon after the service’s launch.
And it's no surprise that the BBC, like most of the rest of the mainstream media, not only counsels "constructive engagement" with the Chinese authorities, but has got the story wrong. From Global Voices:
Actually, as we clarified with Isaac who invests in blog-hosting services, people who set up blogs within BlogChina or Blogbus or the Chinese version of MSN Spaces don’t have to register. Just people who set up blogs on their own independent server. I hope the MSM will pick up on this distinction eventually. So far none of them have, because few of the journalists writing the articles on this story actually understand the technicalities of blogging.