A recent blog post of mine for MENG:

So if you ask ten Recruiters their preference on resume format, content and overall preferences you'll get ten different opinions. There are however, two dominating formats: Chronological and Functional. As far as format is concerned I highly prefer the chronological. I don't waiver on this--it is my recommendation 100 out of 100 times.  

The chronological eliminates guesswork and it provides specifics, i.e. what company and at what stage in your career you accomplished the information on the resume. The functional format drives me nuts. It is not slightly less preferred, it's an all out dislike. The functional increases the amount of guesswork and uncertainty on the part of the reader.  In this market recruiters are looking for four key things as they evaluate resumes:

Industry

Employer

Responsibilities

Accomplishments 

The chronological format allows the reader to quickly assess these four areas. The functional requires the reader to toggle back and forth from the different employers, dates of employment and the accomplishments. It requires the reader to assume when and where you did what you  did. I know some may say "that's the Recruiters' job". Although the market is recovering, there are still many highly qualified applicants and it is your responsibility as an applicant to make it as easy as possible for your audience to efficiently evaluate your experience.