ooh well it's easy! From your Blogger Dashboard, go to Settings, scroll down a bit on the Basic Settings page and it's there under the Global Settings heading. It says "Show transliteration button for your posts?" so change that to Yes, and then when you're writing a new post, you have to be in the Compose mode, not Edit, and you'll see a button with the Hindi A on it. If you turn it on right away, it'll convert each word into Devanagari as soon as you finish writing it and press Space, or you can write the whole text, then highlight it and click the button. It's genius, there's a short post about it here http://googleblog.blogspot.com/2007/04/now-you-can-blog-in-hindi.html
and here's the Blogger help thingy for it http://help.blogger.com/bin/answer.py?answer=58226
Let me tell you this, though (Michael und Babasko, hören sie?): good luck on a Mac. The Blogger transliteration function doesn't work on Safari, and Firefox can't handle Devanagari. My solution is going to be to use ITRANS to transliterate, then cut and paste. Geebus.
And I have to say, as much as I would like "snells" to connote little fuzzy creatures, to me the word sounds like a medical condition. "Ohhhh, I'd love to come over and watch a Shashi movie, but I'm really tired. I think I'm coming down with the snells."
Update to post (an hour after I wrote it): holy Indic scripts, Batman! It appears that, at least on the version of Firefox I'm running right this minute, 220.127.116.11, you can use Devanagari with Firefox on Macs! I cannot express how happy this makes me. I hope to get to the bottom of this later this week, but in the meantime, शाबाश!