We used to sell tires through our shop, and I've owned several sets of 'blems'. It's a good way to save some serious bucks on an otherwise expensive set of tires. If you've got a good tire shop with a good connection to the distributor, you can often order a set of blems in most anything.
Blems are warrantied against defects, just like the regular production run of the tires; however you must be prepared to pay the difference between the blem price and the full retail if you have to have one replaced under warranty.
They are functionally the same tire, they only have a cosmetic defect. This will be stuff like the white lettering isn't white and so on. By law, they cannot be sold if they have a known functional defect.
Hope that helps. :cheers: