archive.php not working and hopefully we can improve the template.
It works for me on two installations. Can you give more details?
Can you send the link of your archive page? Let me check?
It's not available on Page Template Option (Page Attribute)
Oh I see what you're saying. It doesn't function as a page template that you can select like that. It functions as a date-based archive page. Like yoursite.com/2012/02 - showing the Feb 2012 pages. Many themes do this now it seems. The Twenty Eleven theme does it this way too.
See this page for a template hierarchy.
Not sure what you mean by not working. Could you elaborate it?