@zephyrwest
You can find a fix in this diff. Let me know if it doesn’t work for you.
http://gist.github.com/10431
For those of you who have no idea what a diff is and just want to replace the file, just look at that link. Open cat-posts.php from the plugin. Remove the 2 lines that you see in red (starting with echo ;. Replace them with the one line you see in green (starting with echo <br /> . $post->post_excerpt;).
Anjuli