Oh yes.
I'm in the tech sector, which is not exactly a fun place to be right now. Suffice it to say I was laid off a year ago and pickings since then have been slim.
The functional resume is a good idea, but you run the risk of people wondering why you're not using the "usual" chronological format.
I explain my gap in employment by pointing out that the economy is in the crapper. Nobody can argue with that! I'm also going for some certifications, which distinguish me in my field and indicate that I did something with my down-time besides sitting around on my butt collecting unemployment. (I'm not implying that you are - but a gap in employment can look that way.)
You can also fill the gap with any volunteer work you might have done.
Good luck
