I think it should be sorted chronologically, the unread ones should be highlighted.

If they keep getting sorted differently every time based on what's read and what's not it can get really confusing.

Some thoughts from a brief IRC jam session:

Maybe we could make this into a sort option, but not the default. And it could totally be only on the full notifications page, i.e. no need to have it on the dropdown/flyout interface.

Ta!

Alternate suggestion: the flyout should only show unread notifications. If there are none, the badge should just link to the special page. (This has been suggested by a pl.wp editor.)

Prioritization and scheduling of this bug is tracked on Mingle card https://mingle.corp.wikimedia.org/projects/flow/cards/194

Personally, I like Bartosz' suggestion in Comment 3. This was the interaction model I was originally pushing for since it seemed like it would be less confusing.

I was just about to file a similar bug - Mark, can you confirm what view you were using? For me, the mobile view of the all notifications page (note: using IE Mobile 9 on Windows Phone 7.8) is sorted oldest-first, meaning that it's necessary to scroll to the bottom after having arrived there from tapping the red notifications indicator.

I was just using the normal view, which is at least sorted newest first, but unread notifications can still be pushed to later in the queue if they aren't the newest ones.

Thanks - I've filed separate bug 61044.