How to add the last modified date to my sitemap?

You can use the formatUpdated function to add the lastmod field to your template's sitemap.xml file. The final result should look like:

<?xml version="1.0" encoding="UTF-8"?>
<urlset xmlns="http://www.sitemaps.org/schemas/sitemap/0.9"> 
  <url>
    <loc>{{blogURL}}</loc> 
  </url>
  <url>
    <loc>{{blogURL}}/archives/</loc> 
  </url>
  {{#menu}}
  {{#isPage}}
  <url>
    <loc>{{blogURL}}{{url}}/</loc>
    <lastmod>{{#formatUpdated}}YYYY-MM-DD{{/formatUpdated}}</lastmod>
  </url>
  {{/isPage}}
  {{/menu}}    
  {{#allEntries}}  
  <url>
    <loc>{{blogURL}}{{url}}/</loc> 
    <lastmod>{{#formatUpdated}}YYYY-MM-DD{{/formatUpdated}}</lastmod>  </url>
  {{/allEntries}}  
</urlset>

I made this change to the sitemap included with the default templates, since I think it's a good idea!