Does Permalink ‘style’ matter?

Ok heres the skinny: I have blogged on blogger for 7 years…i recently converted to WP. I kept the permalinks to the ‘ugly’ default as in the following image:

<img src=”http://www.blogpaul.com/images/2.jpg&gt;

and this post from January 2001 looks fine:
<img src=”http://www.blogpaul.com/images/1.jpg&gt;

Someone recently mentioned that I am not getting the full potential and am losing technorati ratings because I should switch to the name a date permalink, so I did as in the following image.

<img src=”http://www.blogpaul.com/images/3c.jpg&gt;

But when I do so, THIS is what i get from my archive page…a mess??? So my question could be why is this doing this, but more importantly, am I losing anything by leaving my WP to the default structure (the one that is working!).

<img src=”http://www.blogpaul.com/images/2.jpg&gt;

Can you help me understand or even fix if I need to?