Query Posts Creating Problem With Next Archive Page

Right now I’m telling the code to pull up two posts per archive page in my portfolio category. But when I click the older entries button it doesn’t find the other posts in that category, it displays an error page. Any help? I need to get the other posts to show when I click older entries.

<?php get_header(); ?>

<div id="portfolio_content">

<!-- Grab posts -->
<?php if (query_posts('posts_per_page=2')) : ?>
<?php while (have_posts()) : the_post(); ?>

<div style="width:980px; background:#000">

<div class="img">
<a href="<?php the_permalink() ?>">
<?php $image = catch_that_image();
if( $image ) { ?>
<img src="<?php echo $image; ?>"  alt="<?php the_title(); ?>" title="<?php the_title(); ?>, <?php comments_number('No comments','One comment','% comments'); ?>" />
<?php } ?>
</a>
  <div class="title"><?php the_title(); ?></div>
  <div class="desc">Add a description of the image here</div>
</div>

</div>

<?php endwhile; ?>
<?php endif; ?>

<!-- Next/Previous Posts -->
<div class="mp_archive">
<div id="more_posts">
<div class="oe"><?php next_posts_link('&laquo; Older Entries') ?></div><div class="re"><?php previous_posts_link ('Recent Entries &raquo;') ?></div>
</div>
</div>

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