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!
Kind regards,
Rodion K. Kovenkin