This works because unlike the ATOM, the posts in the RSS are sorted in the order of update. Which means, if you changed and republished your 20th post after your, say, 80th post ... your ATOM would remain unchanged. But your RSS would change to say -- 20th post, 80th post, 79th post -- and so on! Stephen thinks this is a bug and an oversight on Blogger's part, but I'm being a bit more optimistic, and think Blogger let this little glitch creep in on purpose, so that people could really come up with a way to show whats been happening with the posts which have gone out of sight!
I'd love to hand you my codes, but Stephen's codes are more customisable. Hence, you can see the various ways of implementing this on your blog over at his post, Last Updated Posts. Ofcourse, seeing that Blogger made no official announcement about the RSS feeds, if they decide to pull it out, this hack goes for a toss. But that shouldn't stop you from enjoying it while its there, and there is no easy way of doing this either.
So, what are you waiting for?
[Update]: Blogger has been suffering some serious hurdles, with speeds going up and down all the time! This could mean some really good news, or maybe one bad one in the near future! Let's hope the RSS feeds aren't pulled out!