I've recently upgraded to WP2, but this problem existed before as well.
I have 3 posts per page, because I use Adsense and have the ads show up at the bottom of each post. The problem is that if someone uses the category dropdown I'm using, ads appear on the first post only - the other two have a big hunk of whitespace. You can see it here.
However, when I select a category from the manage-posts screen in admin, I get ads under every post.
The difference seems to be that the dropdown_cats function sends people to a URL with the category#, and the other method uses the permalinks options. I found the permalink redirect plugin, installed it, found that it did what it said it would, but still no ads.
Now I don't know what to do...anyone have any ideas?
[update] - after doing some more testing, I'm finding that the problem exists only for some categories...could this just be that adsense doesn't think it has any ads to serve?