Blister prevention: I have to wear Crocs so I'm always on a mission to keep my feet as dry as possible. I spray them with antiperspirant when I get out of the shower, and once that dries I dust my feet with baby powder or foot powder (inside the crocs, too). Also, I always wear socks, don't care if I look foolish. For YEARS I struggled with large, bleeding blisters at Disney; I'd even get blisters under my calluses. I finally realized that I HAVE to keep my feet as dry as humanly possible if I want to avoid blisters.
If I feel a hot spot forming, I slap a piece of moleskin over it. I like the thinner moleskin, not the kind with the thick padding. Make sure to curve the corners of the moleskin so it doesn't peel off when you are walking. I find that Dr. Scholl's makes the best moleskin; store brands don't stay in place very well and peel off easily.
If I DO get a blister, I carefully drain it (poke the edge with a clean needle) so the surface of the blister is flat to my skin. Then I put a small piece of toilet paper or tissue over just the blister, and cover with moleskin. I use the tissue so the moleskin doesn't stick to the blister and pull it open when I take the moleskin off at night.