Mike, I'm getting a 404 when I try to visit that page and find out the context of the example. Their example doesn't make much sense, as having subfolders like "direct" really aren't telling you if the traffic is direct.
I agree that it is better to not have a site 10 layers deep, but it's also beneficial to not have 20 parameters on a URL.
However, considering the OP is on Wordpress, I imagine we're talking about the post structure where you have the date as part of the URL. If the site in question is the recipe site from your profile, the following URL doesn't seem too horribly bad.
http://www.copykat.com/2009/02/07/cheddar-chicken-spaghetti/
However, if you're redesigning anyway and want a cleaner URL, you may want to consider a structure that does not include the date. The date really doesn't hold a lot of meaning in this case. I honestly don't care if your spaghetti recipe is two weeks old or five years old when I'm looking for a recipe. I use the Redirection plugin on my Wordpress site, and that plugin has been updated a bit more recently than the other plugin listed so might work a little better with the newer versions. http://wordpress.org/extend/plugins/redirection/
Would love to see other comments and opinions.