HELP!! Posts not showing on home page

Total newbie here and can’t figure out why my posts aren’t showing on my home page. I have 2 posts. Please help!!!

Using MixedMedia Red 1.0 theme

FYI in case if helps narrow down issue….

I have Recent Posts widget and it doesn’t show on home page but if I select a post, then it does with my recent posts listed

When I change settings/reading to static page, that works. When show latest posts, just says Not Found
Sorry, no posts matched your criteria.

Here’s my index_php coding (I’m assuming that’s where problem would lie???)

<?php get_header(); ?>

<div id=”content”>
<div class=”postwrap”>
<?php if (have_posts()) : ?>
<?php while (have_posts()) : the_post(); ?>
<div class=”post” id=”post-<?php the_ID(); ?>” style=”padding-bottom: 40px;”>
<div class=”posthead”>
<h1>” href=”<?php the_permalink() ?>” rel=”bookmark”>
<?php the_title(); ?>
</h1>
<small class=”postauthor”>Posted by
<?php the_author() ?>
<?php edit_post_link(‘Edit’); ?>
</small>
<p class=”postdate”> <small class=”month”>
<?php the_time(‘M’) ?>
</small> <small class=”day”>
<?php the_time(‘j’) ?>
</small> </p>
</div>
<div class=”postcontent”>
<?php the_content(‘Read the rest of this entry »’); ?>
</div>
<div class=”postinfo”>
<li class=”postcomments”>
<?php comments_popup_link(‘0 Comments’, ‘1 Comment’, ‘% Comments’); ?>

<li class=”postcat”>Filed under:
<?php the_category(‘, ‘) ?>

</div>
</div>
<!–<?php trackback_rdf(); ?>–>
<div class=”clearer”></div>
<?php endwhile; ?>
<?php else : ?>
<h2>
<?php _e(‘Not Found’); ?>
</h2>
<p>
<?php _e(‘Sorry, no posts matched your criteria.’); ?>
</p>
<?php endif; ?>
<div class=”Nav”>
<?php if(function_exists(‘wp_pagenavi’)) { wp_pagenavi();} else { posts_nav_link(‘ — ‘, __(‘« Go Back’), __(‘View more posts »’));} ?>
</div>
</div>
<?php get_sidebar(); ?>

</div>
<?php get_footer(); ?>