Inspired by something similar (though far less robust) I created for Movable Type a couple years back, I’ve built a plugin to provide for relative dates within WordPress. If interested, check out the Relative Dates project page for a description of what a relative date is, the source code, and installation instructions.
The response to my last WordPress plugin, Smart Archives, has been incredible, and while I’m flattered by the fact that so many people are using it, I sometimes feel smothered by the incessant wave of support e-mail it seems to generate. While I welcome questions from those needing help, I do ask that you please do some research before contacting me for assistance. At some point I’m going to have to start ignoring the What’s PHP? e-mails. 🙂