Next/previous Navigation Does Not Keep to Current Category

Hello JuggleDad, Miles, Paulae & Flynn!
I have the latest wp3.0 and Atahualpa 3.5.3. My posts are under multiple categories. ie, one post might be under "South" category and also under "Active" category.

I have set the Ata Theme Option+Next/Previous Navigation+New: Keep next/prev. links on SINGLE post pages to same post category? TO = YES.

I do not have any cache running.

I have set Location of Next/Previous Post Navigation on SINGLE Post Pages to Above & Below.

Unfortunately when you choose say http://ibooktravel.com.au/category/n.../south-island/ (all "south" tours) then click a post, the navigation shows "North" posts...

I then installed "Hikari Category Permalink" and set the 'default' category on all posts to either north, south or both, but it still displays 'North' tours in the next/previous navigation.

The Version Change Log for Ata 3.4.6 states:
DONE: RFE: next/previous - keep it to current category - several requests see
http://forum.bytesforall.com/showthr...vious+category
http://forum.bytesforall.com/showthr...vious+category
http://forum.bytesforall.com/showthread.php?t=3690

but this is not working for me. Do any of you have experience with this? Do I need to try again with 'Smarter Navigation' plugin, eg put 'previous_post_smart()' in the theme files?
Regards, Joan