I'm having a problem (same one as in this thread http://wordpress.org/support/topic/just-one-category-not-working-in-31-beta?replies=2 ) that I think is growing out of the same issue.
The plugin (Just One Category) that used to make it possible to show posts in a parent category, without the posts from that parent category's children categories, on an archive page, no longer works.
Since the 3.1 upgrade, when Just One Category is activated, you get no posts at all on any Category archive pages. None. When you deactivate Just One Category, you get the Category Archive pages working, but pages for a parent category show all the posts from that category AND all the posts from that category's children.
Neither putting the code above into functions.php nor the patches have any effect. So maybe this is a totally separate problem?
Does seem that there is something generally different about the way 3.1 deals with categories...and several different plugins that interact in some way with categories are no longer working.