Daryl, that's the first I've heard of that particular issue with the no body to the posts and I've been watching the support forum for over 2 years now. Feel free to drop a message on there detailing the issue.

http://wordpress.org/support/plugin/blogger-importer

You are right though that the API is a double edged sword in that it means no exporting / large files is needed but on the other hand debugging can be harder. Frederick, perhaps you can architect a solution that can decouple the steps some how so that the importers can be unit tested.

The current solution for the long running process with the blogger importer is the download in batches and store the state at the end of each batch. This means that if it stops in the middle you can start off from where you left off.

One thing I have seen is that there are two types of users for these importers, the first are migrating a site and plan to decommission the old one once they've done.
The other type of users are using the system to mirror sites or periodically update a site.

On a separate note, the issue with large XML files is that often parsers need to load the whole file and model it as an object internally. One solution to that problem is to use a SAX style parser instead.