The morphologies of spin-coated thin films of the immiscible polymer blend of polystyrene and poly(tert-butyl acrylate) (PS/PtBA) are characterized by X-ray photoelectron spectroscopy (XPS), Fourier transform infrared spectroscopy (FTIR), and scanning force microscopy (SFM) combined with selective dissolution. PS and PtBA are found to phase separate laterally in the thin films after spincoating. The overall trend with blend composition is for PS islands to form when the PS:PtBA ratio is less than unity and for PtBA holes to form when the PS:PtBA ratio is larger than unity. The thickness of PS phases always exceeds that of the PtBA phases with both thicknesses increasing linearly with concentration of the spin-coating solution. The addition of P(S-b-tBA) diblock copolymer decreases the overall domain dimensions. After long annealing periods, PtBA is found to segregate preferentially to both the air-polymer interface and the polymer-substrate interface, effectively encapsulating PS droplet domains. A simple free energy model developed for the annealed specimens predicts a local free energy minimum as a function of PS droplet diameter, accounting for the observed stability of PS droplet phases and their very slow growth upon annealing. The surface tension of PtBA and the interfacial tension between PS and PtBA are shown to be critical parameters that affect the domain morphology in annealed PS/PtBA thin films.