For that, you want to highlight a specific picture or event, but still have little anecdotes sprinkled here and there. They want you to go through the Timeline like you'd go through a photo album where you'd have a mix of the big events (graduation, marriage, births, etc.) with the little things, so that you can hear "oh, remember that one? When we went to Disneyland and you fell in the pool…", "you were so mad at him that day! Look at what you wrote on your wall…", etc.
Not having just a list makes it a bit more interesting to peruse. It's like going through a shoebox of photos and souvenirs, spread them out and you see some things, not others… I'm not saying they've nailed it, but it's a first version of it and it's an interesting experiment. It's hard to make an interesting photo album by hand, it's even harder to make something semi-automated.
As as side-note: The new timeline is why I quit FaceBook in December.
I find that interesting since I personally rarely see people's profiles or timelines.
Use the EXIF timestamp of when each photo was taken. Make a web page for each month, and group photos together by day to make it easy to skim through. Limit the number of photos shown on this page for any given day (put the rest on their own page) and you've automatically got variety. With those two simple organizational steps, viewers of the photo collection are set up for success in quickly finding photos that interest them, assuming there are some.
That's what your feed (i.e. the "main" page) is for, right?
The timeline is for when you want to look at just one person's activity... it's basically "WHERE user = 'xyz' ORDER BY entry_date DESC".
About the only thing I use FB now for is the feed, but then Twitter serves the same function w/ better control over who I want to follow.
It creates a badly jumbled view of the information I was really hoping to see -- what's going on with me and my friends? I can handle a straight chronological list very easily.
This is an interesting answer to the question 'why didn't they stick with the simplest approach?'