I've seen that the logout option does not work with WordPress 2.7. It's just because of the missing nonce in the url.
Logout link should be something like this: http//blogurl/wp-login.php?action=logout&_wpnonce=xxxxxxx
The nonce value is created by this call: wp_create_nonce('log-out')
Hope this helps to solve this issue because it's a nice plugin.