I have 3 entries.

Here is what happens.

I post entry #3. Everything looks fine. I edit/save entry #3 and entry #1 disappears from my index.html. According to what my mt panel says, I still have 3 entries and entry #1 is still in my archive with all of its comments as well, and I can still go to its edit page. Everything is fine except that it doesn't appear in my main index page anymore. I tried republishing entry #1 and even change #3 back to how it was before #1 disappeared. Nothing I tried works.

Any help and advice will be greatly appreciated.

By default, MT shows 7 days worth of entries on the main page. Entry #1 must have been older than 7 days and that is why it is no longer displayed there.

An alternative to showing x days worth of entries is to show x number of entries. Instructions for doing this are here.

Does that help?

Oh, when I was first changing things in my preferences I thought that meant it would display my latest 7 entries(regardless of how old they are) and not entries that weren't older than 7 days.

Haha, yes, that fixed the problem. Thank you very much for the help. :)