I have my page set up with a static page for the home page and I have to set one for posts to when I do that. To make my blog posts look normal, I created a page called "blog" that uses the default template that looks like this:
<?php get_header(); ?>
<?php if (have_posts()) : while (have_posts()) : the_post(); ?>
<div class="navigation">
<div class="alignleft"><?php previous_post_link('« %link') ?></div>
<div class="alignright"><?php next_post_link('%link »') ?></div>
</div>
<div class="post" id="post-<?php the_ID(); ?>">
<?php include "title.php"; ?>
<div class="entry">
<?php the_content('<p class="serif">Read the rest of this entry »</p>'); ?>
<?php link_pages('<p><strong>Pages:</strong> ', '</p>', 'number'); ?>
<?php the_tags(); ?>
</div>
<?php comments_template(); ?>
</div>
<?php endwhile; else: ?>
<p>Sorry, no posts matched your criteria.</p>
<?php endif; ?>
<?php get_footer(); ?>
For some reason, there are no "next" or "previous" links. I don't know what's going on :(