I had a similar problem. Iit was not do to the footer.php. It had to do with the fact that I had 3rd party cookies turned off in Firefox 3. I added an exception for wordpress.com and it started working.
I found my problem. When the Adhesive 3.1.1 (http://www.asymptomatic.net/wp-hacks) plug-in is enabled it breaks the Options/Reading/Blog Pages/Show At Most/X Days.
I just discovered this problem after upgrading to 2.0.1 (at least I think that’s what did it). No matter what I set the number of days to, it shows every post in the database. If I change this to display the number of posts, it works just fine.
