Do not see a link for previous entries at the bottom of a page

needed to add

<!– Navigation –>
<div class=”navigation”>
<div class=”navigation-previous”><?php next_posts_link(‘? Previous Entries’) ?></div>
<div class=”navigation-next”><?php previous_posts_link(‘Next Entries ?’) ?></div>
</div>
<!– /Navigation –>

after <?php endwhile; ?>

the code above is exactly what i have in our index.php

<?php endwhile; else : ?>
			<div class="post">
			<h2>Page Not Found</h2>
			<p>Looks like the page you're looking for isn't here anymore.</p>
			<?php include(TEMPLATEPATH.'/searchform.php'); ?>
		</div><!-- .post -->
		<?php endif; ?>
			<div class="navigation clear">
		<div class="alignleft"><?php next_posts_link('&laquo; Older Entries') ?></div>
		<div class="alignright"><?php previous_posts_link('Newer Entries &raquo;') ?></div>
		</div>

and i didn’t touch it but now, suddenly after upgrading to 3.1, it’s not working. I’m new to this particular website, and am not sure what it did before, but now it links to /blog/page/2 but displays exactly the same most recent posts, instead of the next oldest batch.
it’s a custom theme (not mine) and i’m wondering if there’s something up with the query…

<?php // Which page of the blog are we on?
			$paged = get_query_var('paged');
			query_posts('cat=1'); // <- EXCLUDE PRESS RELEASE AND PRODUCTS FROM THE BLOG
		?>

and i’m also not super fluent in this stuff, so might be looking at the wrong thing – but this is where i’m coming to after searching & reading multiple posts on the idea.

any thoughts?