I recently had to make a list of all the active blogs for the university’s blog site running WordPress MU. Here’s the code to do so:
See the gist on github.

Blog Directory

You’ll notice the query is set to filter out blogs that are marked as archived, spam, private. Also, it hides the main blog from the list.

UPDATE: As posted in the comments by Brad, you can sort these in alphabetical order by the site name by using the following code:
See the gist on github.