Sadly this plugin just doesn't work.
Here's what I did:
1) I installed the newest version (1.1.0) into WP 2.7.1
2) Went to "Postmash" under Posts and rearranged my posts
3) Installed the following in the default WP theme (In Index.php)
<?php
$wp_query->set('orderby', 'menu_order');
$wp_query->set('order', 'ASC');
$wp_query->get_posts();
?>
<?php if (have_posts()) : ?> <-this was here originally
And the order of posts remains the same on the website; I'm assuming that this worked at some point in the past...