Is MVVM an alternative to Expression Blend?

No, not at all. In fact, MVVM is supposed to be a way to help a designer using Expression Blend work with the developer writing the functionality. The idea is that MVVM provides better separation between the View and the ViewModel. This gives you some advantages:

• You can replace the real ViewModel with a mock ViewModel (XML based, perhaps) which allows the designer to have some data to play with inside of Blend.
• You can write unit tests for your ViewModel which (hopefully) includes all your functionality. The unit test becomes another consumer of your ViewModel, just as the View is.