I can confirm that UAM ver. 1.2.2 works fine with the latest WordPress 3.4.1
I found one little problem with "Recent comments" widget - it showed all comments, so the plugin didn't filter them (I should see only the ones that I'm allowed to).
The fix is simple, have a look:
For those who have problems, this is how I use it:
1. Install UAM, enable it (settings: I fully hide sites and posts but I don't block files).
2. Create User Group, i.e. "Friends" - don't set any role.
3. Create posts' category i.e. "Weekend Trip" - you will see that you can apply a Friends group to this category - do it.
4. Create a post - and choose a proper category ("Weekend Trip") and also User Group ("Friends").
This way you have a category containing posts that can only be seen by "Friends" group.