It may not work as well for posts, but I think it's useful on my blog for my visitors, since many of them will be seeking the same info -- but mine is not an "all time" list, either, just the most recent 7 days.
I also use the widgets provided by wordpress.com for the most visited posts/pages (both are included) and most clicked links -- the most popular posts are usually really recent ones, which makes sense for a widget that draws from the last couple days of stats. The most popular clicks, however, vary widely -- they can be click-throughs from recent posts or click-throughs from pages, sometimes pages that are "old."
Anyway, I figured that providing the most popular pages, I was providing visitors to the blog one more way to find what they're looking for -- even if it may be a self-reinforcing list, so to speak.