1.

To use this, you should install the expandingarchives.py file in your plugin directory.

2.

You will also need to download the Prototype Javascript library (just the
prototype.js file) and make sure it is loaded with each page:

http://prototypejs.org/

3. 

Finally, I added the following configuration options to my config.py:

  py['archive_template_year'] = '<li><a href="#" onclick="Element.toggle(\'archive_year_contents_%(Y)s\'); return false;">%(Y)s</a><ul id="archive_year_contents_%(Y)s">%(month_contents)s</ul></li>'
  py['archive_template_month'] = '<li><a href="%(base_url)s/%(Y)s/%(b)s">%(b)s/%(Y)s</a></li>'