I am developing a rails app which I am planning to host on heroku but I would also like to include a blog at http://mydomain.com/blog.
I need a simple, single-author soultion with tags, commenting (I was thinking of disqus for this) and the ability to add images.
What are my options apart from rolling my own?
Really it depends what specific functionality you're looking for. I would recommend you have a look through these and see which suits you best:
http://ruby-toolbox.com/categories/content_management_systems.html
You can search GitHub for some easy-to-use and lightweight solution to build your blog.
My favorite simple blog system is Webby. I don't think it supports tags by default, but at least one person added them: http://aaronqian.com/articles/2009/04/06/adding-blog-tags-using-webby.html You can also find folks using disqus with Webby.
Jekyll has attracted a very active community since its use with Github Pages.
I'm not sure what you mean by "running alongside my in development app". Do you mean the blog should run as part of your app on Heroku? Or that it will run completely separately on mydomain.com? If it is separate, then Heroku won't be involved at all.
Any reason you can't just put he blog at blog.mydomain.com and host it elsewhere?
That way you'll have more blogging software options, and are not dependent on nothing going wrong with the same site you're hosing your Rails app on.
You'll also not have to figure out how to run 2 Rails apps on the same hostname via Heroku.