I would like to ask if the sitemap generator also work for the benefit of old posts. You see, I just installed the sitemap plugin on my wordpress plug. Will this help in the indexing of my old posts?
Yes ofcource. The 'Google XML Sitemap Generator' plugin creates a sitemap with all your posts and pages. Make sure you set it up properly from the backend. Apart from creating sitemaps, that plugin also pings the search engines whenever a new post/page is added, which is another benefit.
Search engines like Google, Yahoo and others use site maps to recognize the path of links and the interconnection between each pages. They can be used in old pages too as those will make search engines easier to find our web site.