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I've seen some pages not getting indexed almost certainly to duplicate content so I try to keep posts to 1 category. But the bigger concern I've had is that archived posts still carry all your links and once your blog gets some size this can lead to penalties for "site wide" linking (yes, they can hit you for site wide's on your own domain).
For example, you keep say 10 posts on your home page so each "next" page in your blog will have 10 each. After a few months this can easily lead to 10+ archived pages which all have the same navigation/links. I haven't yet come up with an ideal way to deal with these short of deleting (or redirecting) older archived pages or increasing the posts-per-page count.
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