Pagination stays on the same page

I am using WP Page Numbers plugin to show pagination. Problem is when I click ‘next’ – the page seems to load on the same page. I understand that the issue came from query_posts but I am not sure how to fix it.

This is the code that I am using atm:

<?php query_posts('category_name=notes_blog&showposts=3'); ?>
            <?php if (have_posts()) : while (have_posts()) : the_post(); ?>
                    <div class="post_wrapper">
                    <article <?php post_class() ?> id="post-<?php the_ID(); ?>">

                        <h2>
                            <a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to
                            <?php the_title_attribute(); ?>"><?php the_title(); ?>
                            </a>
                        </h2>

                        <div class="post_content">
                            <?php the_excerpt();?>
                        </div>

                    <!-- Can always include comment later on // commentform styled under layout.css -->

                    </article>

                        <aside class="aside_option">
                            <ul class="published">
                                <li><?php the_time('F jS, Y') ?></li>
                                <li>posted at <?php the_time() ?></li>
                                <li><span class="italic">by</span> <?php the_author(); ?></li>
                            </ul>
                        </aside>

                    </div> <!-- whole post & share (post_wrapper) -->

                <?php endwhile; ?>

                <?php if (show_posts_nav()) : ?>
                <?php if(function_exists('wp_page_numbers')) { wp_page_numbers(); } ?>
                <?php endif; ?>

                <?php else : ?>

                        <h2>Not Found</h2>
                        <p>Sorry, but you are looking for something that isn't here.</p>
                        <?php get_search_form(); ?>

                <?php endif; ?>

Live version available here

Thanks alot – I really appreciate it!