I am attempting to perform a custom archive for those posts, however i would like it to look quite different compared to category-specific archives. I have accomplished this to date by placing the code below right into a page on my small site.

Can you really add pagination to something similar to this? I figured that 'paged' => $paged line might get it done, but no such luck.

Here's my code: (I am utilizing a custom thumbnail size should you be wondering what that describes.)

<?php
global $post;
$args = array(
    'posts_per_page' => 3,
    'offset' => 0,
    'paged' => $paged
    ); 
$thumbnails = get_posts($args);
foreach ($thumbnails as $post)
{
    setup_postdata($post);
        ?>
    <div class="featuredarticle">
    <h4 class="entry-title"><a href="<?php the_permalink(); ?>"><?php the_title(); ?></a></h4>
        <div class="featuredimage">
<a href="<?php the_permalink(); ?>"><?php the_post_thumbnail('featured'); ?></a><br />
            </div>
    </div>
<p><?php the_excerpt(); ?></p>
<div class="entry-utility">
<span class="read-more"><a href="<?php the_permalink(); ?>">Read More</a></span>
    </div>

    <?php 
    }
?>

This code works excellent inside a page querying posts and employ pagination.

<?php
/**
 * Template Name: Page of Books
 *
 * Selectable from a dropdown menu on the edit page screen.
 */
?>

<?php get_header();
    if ( have_posts() ) while ( have_posts() ) : the_post();
the_content(); 
endwhile; wp_reset_query(); 
?>
        <div id="container">
            <div id="content">
<?php 
$type = 'book';
$args=array(
  'post_type' => $type,
  'post_status' => 'publish',
  'paged' => $paged,
  'posts_per_page' => 2,
  'caller_get_posts'=> 1
);
$temp = $wp_query;  // assign orginal query to temp variable for later use   
$wp_query = null;
$wp_query = new WP_Query($args); 
?>

<?php

 get_template_part( 'loop', 'index' );?>
            </div><!-- #content -->
        </div><!-- #container -->

<?php get_sidebar(); ?>
<?php get_footer(); ?>