I recently had to setup all my new blogs on GoDaddy this past weekend and it was a pain! Let me tell you what, I would hope that others find this post so they don't have to go through the same thing. I found a old post with not up to date information on setting it up. So here is the up to date version as of 3/12/08 and GoDaddy Hosting Control Center V2.5.0.
1. Go to http://www.dotnetblogengine.net and go download the entire source located here.
2. Remove the following line from web.config. This is due to Godaddy has medium trust set on the site.
<!--<trust level="Medium" />-->
3. Publish the site using any sort of FTP upload client or even Visual Studio. I would not compile the website. Let the website compile it self on GoDaddy.
4. Open up GoDaddy and the Site Configuration manager.
5. Go to the File Manager.
6. Check Mark the App_Data folder and then click the permissions button as circled below.
7. Set the access to Read, Write and Reset all children to inherit. This will allow all files under it to inherit the above settings. This allows you to move files in and out of App_Data folder and not having to keep updating the permissions in GoDaddy.
8. Click okay and then move on over to IIS Settings.
9. Create a Folder called App_Data. Before you complete the next step, let me advise you that BlogEngine did not say to do this, but I found it to be the only way to get BlogEngine to work. So now Click on the Advance button. Click the Classic Settings. From here it will take a few hours to set up and if the admin's are really good, it will be done in about 30 minutes.
10. Happy Blogging!