
What is an XML Sitemap
An XML Sitemap is a XML document which lists all of the URLs on your Blog/Website. This XML document is used by Search Engines to identify and crawl pages on your Website. Sitemaps can have xsl style sheets attached to them but as of now, the Blogger Sitemap doesn’t have any style sheets attached to it.The sitemaps generated by blogger has the url and the last modified date, which will help search engines in identifying fresh content on your blog, crawl and index the same.
How to create a Sitemap for blogger
Just sit back and relax. The Blogger Platform will create it for you. To access the sitemap, jut add sitemap.xml to the end of your Blog’s URL.You no longer have to add the feeds as sitemaps in Web Master tools.
For Example http://googleblog.blogspot.com/sitemap.xml will give you the Sitemap of the Official Google Blog. Since that blog has way too many posts, this URL doesn’t give the actual sitemap but a sitemap index which refers to the actual sitemaps.At the time of making this post, this index has 3 individual sitemaps urls.

The XML document contains references to three sitemaps, which has details of all URLs on the Google Blog.
For Blogs with lesser number of posts(less than 1000), sitemap.xml will give you the actual sitemap.
Example : Official Android Developer Blog - http://android-developers.blogspot.com/sitemap.xml

As of now, these sitemaps don’t work on Custom Domains. If you are using a Custom domain blog, you will have to wait a little longer to see the sitemap in action. But you can get a preview of the sitemap if you append sitemap.xml to your Custom Domain Blog’s BlogSpot address.
Adding the Sitemap to Webmaster Tools
Till date,the only way of adding Blogger sitemaps to webmaster tools was to use the Blogger feeds,providing a separate feed for every 500 posts. Once, the XML sitemaps are rolled out, you will no longer have to do all this. Just add sitemap.xml as your Blog’s sitemap(even if it has more than 1000 posts).