Pagination with custom post type not working

Hello,
For some reason I can’g get pagination using previous_posts_link and next_posts_link working.

Here is the code I have…

<?php // The Query
<?php $paged = (get_query_var('paged')) ? get_query_var('paged') : 1; ?>
$the_query = new WP_Query(
	array(
		'post_type'=>'article',
		'posts_per_page'=>2,
		'orderby'=>'date',
		'paged'=>$paged
	)
);

// The Loop
while ( $the_query->have_posts() ) : $the_query->the_post();

	if($the_query->current_post == 0 && $paged == 1) :
	?>
	<article class="latest">
		<div class="summary">
			<h4>LATEST ARTICLE:</h4>

			<h2><?=the_title(); ?></h2>
			<div class="entry-meta">
				<?php proagent_posted_on(); ?>
			</div><!-- .entry-meta -->
			<div class="entry-content">
				<?=get_the_content_limit(300, 'More'); ?>

			</div><!-- .entry-content -->

			<div class="entry-topics"><?=get_the_term_list($post->ID , 'topics', 'Topics: ',', '); ?></div>
		</div>
		<?=the_post_thumbnail('feature-post-thumbnail'); ?>
	</article>

	<?php else: ?>
	<article class="previous">
		<?=the_post_thumbnail(); ?>
		<div class="summary">
			<h2><?=the_title(); ?></h2>
			<div class="entry-meta">
				<?php proagent_posted_on(); ?>
			</div><!-- .entry-meta -->
			<div class="entry-content">
				<?=get_the_content_limit(300, 'More'); ?>

			</div><!-- .entry-content -->

			<div class="entry-topics"><?=get_the_term_list($post->ID , 'topics', 'Topics: ',', '); ?></div>
		</div>
	</article>
	<?php endif; ?>

<?php endwhile; ?>
<nav id="nav-below" class="navigation">
	<div class="alignleft"><?php previous_posts_link('« Newer Articles') ?></div>
    <div class="alignright"><?php next_posts_link('Older Articles »') ?></div>
</nav><!-- #nav-below -->

Also.. just noticed it works when I go to /articles/page/2 there is a link to /articles/ like there should be but from the /articles/ page there is no link to page 2.. WHY?

PLEASE help if you can… this is driving me crazy.

Thanks! mark.