How to Display the most recently added products first in magento

Step 1: To Achieve this copy the file Toolbar.php 

from app/code/core/Mage/Catalog/Block/Product/List/Toolbar.php. Create a Directory Structure in local and paste the Toolbar.php
as shown below

app/code/local/Mage/Catalog/Block/Product/List/Toolbar.php

Step 2: Around line 232 you should see the below code in setCollection

function

if ($this->getCurrentOrder()) {

    $this->collection->setOrder($this->getCurrentOrder(), $this->getCurrentDirection());

   }

Replace the above code with the new code given below

if ($this->getCurrentOrder()) {

    if(($this->getCurrentOrder())=='position'){

        $this->_collection->setOrder('entity_id','desc');

    }

    else {

     $this->_collection->setOrder($this->getCurrentOrder(),$this->getCurrentDirection());

    }

  }

Now the newly added products will be displayed first in your magento store.