Yes, the bug is still present on the Feb 4 2008 Windows build.
The reason why your layer selector switches back to 'bottom,' Tom, is because you're selecting them one at a time. This was something that I didn't make clear; in step 7, you have to drag-select multiple objects at once. If multiple objects are selected at once, Inkscape won't switch layers, even if the multiple objects are all in the same layer.
Yes, the bug is still present on the Feb 4 2008 Windows build.
The reason why your layer selector switches back to 'bottom,' Tom, is because you're selecting them one at a time. This was something that I didn't make clear; in step 7, you have to drag-select multiple objects at once. If multiple objects are selected at once, Inkscape won't switch layers, even if the multiple objects are all in the same layer.