... and you can only use alphanumeric characters, underscore, dash and period.
It's important to note that you can choose a custom URL only when you create a post and you can't change it later.
Why use this feature? Create shorter permalinks, use different keywords in the URL, improve search rankings. "A site's URL structure should be as simple as possible. Consider organizing your content so that URLs are constructed logically and in a manner that is most intelligible to humans," suggests Google.
As a side note, there's a mistake in the help center page for this feature: "Because Blogger automatically creates the URL from information from your post title, your URL would change should you decide to edit the title. This would result in broken links, and fewer visitors to your blog." That used to be a major annoyance in the pre-2006 Blogger, but it's no longer the case today.