Bleh, yeah, I know it's been around for a while, but I never really plugged it here, so here we go.
The MonthlyArchives plugin creates a new archive page, where the posts are categorized by month, and divided by years. You can see an example here: http://c.inexistent.org/archives/. (the stats at the beginning aren't included)
Download and instructions at http://wiki.wordpress.org/Plugin/MonthArchives