There is a bug with paged_archives addon I think. At least it works wrong when it comes to IN category pages navigation. I mean when you open any category that have more than one page and want to open the second page of THIS category it opens the second page of WHOLE archive. I think it is version mismatch. When I take the paged_archive.php from the RC1 and put it in my addon folder on my server if works well. Hope it will help.
Thanks for amazing work guys!
Rodion K. Kovenkin