Eu descobri o problema. Substitui
<?php query_posts(’cat=7&showposts=5′); ?>
<?php while (have_posts()) : the_post(); ?>
por
<?php $paged = (get_query_var(‘paged’)) ? get_query_var(‘paged’) : 1; ?>
<?php query_posts(“cat=7&showposts=5&paged=$paged”); ?>
<?php while (have_posts()) : the_post(); ?>
