Javascript is not capable of sorting Array's that contain strings and numeric values as human readable.

UPDATE 5/19/2010
New 0.4 version that includes many fixes and supports a more robust natural sort. The development version still weighs in at 1.6KB.

SOLUTION
Here's a very simple "Natural Sort" implementation that shares the same core "chunking" concept as displayed in many implementations that appears to have been first adopted by Dave Koelle.

I wanted to build a function that split each string to compare for sorting into an array in the appropriate order based off blocks of strings and blocks of numbers similar to how the String.split() functionality works. This is the core of the "chunking" so that you can do the sort comparison off portions of the string and rely on the browser's built in < and > operators. Another goal was NOT to rely on the String.charCodeAt() and compare ASCII character values on a per-character basis. This seemed like complete overkill considering once each "chunk" can be properly sorted off the browser's built-in comparison operators properly.

The approach I used was to treat everything as a string, delimitate the numeric and alpha portions of each string by the null char(0) and then split the string into an array off the null char(0) delimiter. This null char(0) will almost never appear in a string - and if it did we'd not really be able to do a comparison operation off of it.

Here's the simple naturalSort function to be used to point the Array.sort() method to:

/*
 * Natural Sort algorithm for Javascript - Version 0.4 - Released under MIT license
 * Author: Jim Palmer (based on chunking idea from Dave Koelle)
 * Contributors: Mike Grier (mgrier.com), Clint Priest, Kyle Adams
 */
function naturalSort(a, b){
	// setup temp-scope variables for comparison evauluation
	var re = /(^[0-9]+\.?[0-9]*[df]?e?[0-9]?$|^0x[0-9a-f]+$|[0-9]+)/gi,
		sre = /(^[ ]*|[ ]*$)/g,
		hre = /^0x[0-9a-f]+$/i,
		ore = /^0/,
		// convert all to strings and trim()
		x = a.toString().replace(sre, '') || '',
		y = b.toString().replace(sre, '') || '',
		// chunk/tokenize
		xN = x.replace(re, '\0$1\0').replace(/\0$/,'').replace(/^\0/,'').split('\0'),
		yN = y.replace(re, '\0$1\0').replace(/\0$/,'').replace(/^\0/,'').split('\0'),
		// hex or date detection
		xD = parseInt(x.match(hre)) || (new Date(x)).getTime(),
		yD = parseInt(y.match(hre)) || xD && (new Date(y)).getTime() || null;
	// natural sorting of hex or dates - prevent '1.2.3' valid date
	if ( y.indexOf('.') < 0 && yD )
		if ( xD < yD ) return -1;
		else if ( xD > yD )	return 1;
	// natural sorting through split numeric strings and default strings
	for(var cLoc=0, numS=Math.max(xN.length, yN.length); cLoc < numS; cLoc++) {
		// find floats not starting with '0', string or 0 if not defined (Clint Priest)
		oFxNcL = !(xN[cLoc] || '').match(ore) && parseFloat(xN[cLoc]) || xN[cLoc] || 0;
		oFyNcL = !(yN[cLoc] || '').match(ore) && parseFloat(yN[cLoc]) || yN[cLoc] || 0;
		// handle numeric vs string comparison - number < string - (Kyle Adams)
		if (isNaN(oFxNcL) !== isNaN(oFyNcL)) return (isNaN(oFxNcL)) ? 1 : -1; 
		// rely on string comparison if different types - i.e. '02' < 2 != '02' < '2'
		else if (typeof oFxNcL !== typeof oFyNcL) {
			oFxNcL += ''; 
			oFyNcL += ''; 
		}
		if (oFxNcL < oFyNcL) return -1;
		if (oFxNcL > oFyNcL) return 1;
	}
	return 0;
}

CODE.GOOGLE PROJECT

• naturalSort.js http://js-naturalsort.googlecode.com/svn/trunk/naturalSort.js
• unit-tests.html http://code.google.com/p/js-naturalsort/source/browse/trunk/unit-tests.html

DATE SORTING SUPPORT
Finally added the ability to sort off Date objects based off the .getTime() unix epoch timestamp comparisons. This will only work against valuation of fields that in their entirety can instantiate a valid Date object via the Date constructor. This means that any valid input string that can create a date via the Date constructor, i.e. new Date('10/10/2005') or new Date('Tue Sep 09 2008 20:32:28 GMT-0700 (Pacific Daylight Time)'), can work. The value cannot contain any other character that might throw the Date constructor off, i.e. a '10/10/2005 original' will not work.

UNICODE SUPPORT
This sort algorithm works against UNICODE characters/scripts as well because it relies on the browser's built in string comparison operators. I have a working demo of a this in action sorting a column in my http://www.overset.com/2008/08/30/animated-sortable-datagrid-jquery-plugin-jtps/ post.

SPEED
Upon initial testing this function appears to be 60% faster than Brian Huisman's Javascript implementation of Dave Koelle's Alphanum algorithm when sorting against string fields of around 20 characters on average and 500 entries in the array. It appears to be the same speed when sorting against purely numeric integer-based array values at around 500 entries.

BROWSER SUPPORT
FF3, IE8, Chrome, Safari

UNIT TESTS
unit-tests.html - Unit tests were built with QUnit and offer more examples and supported sortable types:

EXAMPLES
Sorted arrays using this functionality:

// Simple numerics
['10',9,2,'1','4'].sort(naturalSort)
['1',2,'4',9,'10']

// Floats
['10.0401',10.022,10.042,'10.021999'].sort(naturalSort)
['10.021999',10.022,'10.0401',10.042]

// Float & decimal notation
['10.04f','10.039F','10.038d','10.037D'].sort(naturalSort)
['10.037D','10.038d','10.039F','10.04f']

// Scientific notation
['1.528535047e5','1.528535047e7','1.528535047e3'].sort(naturalSort)
['1.528535047e3','1.528535047e5','1.528535047e7']

// IP addresses
['192.168.0.100','192.168.0.1','192.168.1.1'].sort(naturalSort)
['192.168.0.1','192.168.0.100','192.168.1.1']

// Filenames
['car.mov','01alpha.sgi','001alpha.sgi','my.string_41299.tif'].sort(naturalSort)
['001alpha.sgi','01alpha.sgi','car.mov','my.string_41299.tif'

// Dates
['10/12/2008','10/11/2008','10/11/2007','10/12/2007'].sort(naturalSort)
['10/11/2007', '10/12/2007', '10/11/2008', '10/12/2008']

// Money
['$10002.00','$10001.02','$10001.01'].sort(naturalSort)
['$10001.01','$10001.02','$10002.00']

// Movie Titles
['1 Title - The Big Lebowski','1 Title - Gattaca','1 Title - Last Picture Show'].sort(naturalSort)
['1 Title - Gattaca','1 Title - Last Picture Show','1 Title - The Big Lebowski']