Use this in index.php

<?php next_posts_link('← Previous Entries |') ?> 
<?php previous_posts_link('| Next Entries →') ?>

Use this in all other pages (single, search, archive…)

<?php previous_post_link('← %link'); ?>  
<?php next_post_link('%link →'); ?>

Some template tags have changed, check Codex for more.

Thanks!
robyn

The optional excerpt relies on two things, one is the theme have the the_excerpt tag where the excerpt need to be visible and the admin/you add excepts outside what is generated by WordPress. If this seem confusing, it is not.

When you write a post in WordPress, the the_excerpt tag usually pulls the first few lines and make it an excerpt, however, WordPress also allows you customize you excerpts right when you write a post under advanced options. There excerpts are optional hand-crafted summaries of your content.

In order to make your theme show excerpt, here’s what you do:

Open archive.php (or Archive in WP) and look for these lines:

<li><a href=”<?php the_permalink() ?>”><?php the_title(); ?></a> | <small> Posted by <?php the_author() ?> on <?php the_time(‘M d Y’);?> under <?php the_category(‘, ‘) ?> </small></li>

Copy this code and past it right below the code above in your archive.php:

<li><?php the_excerpt (‘Read the rest of this entry »’); ?></li>

That should do it, now you can add custom excerpts and it will show up in your archives.

<ul>
<li><a href=”<?php echo get_settings(‘home’); ?>/”>Home</a></li>
<?php wp_list_pages(’sort_column=menu_order&depth=1&title_li=’); ?>
</ul>

To add an external link, simply add the HTML like below:

<ul>
<li><a href=”<?php echo get_settings(‘home’); ?>/”>Home</a></li>
<?php wp_list_pages(’sort_column=menu_order&depth=1&title_li=’); ?>
<li><a href=”EXTERNAL URI”>EXTERNAL LINK ANCHOR TEXT</a></li>
</ul>