Did a verison update just now. The inbox notification feature should work. Here are the fixes:
- Inbox flag indicator for new private message notification - Remember my password added to the login form - Bad IP list manager - Confirmation buttons on certain admin tasks - Allow users not to include their signature on post - Tab order on POST form - Allow HTML links in the announcements - Additional message border color for denoting new messages
So don't freak out if you find out you have a lot of messages in your inbox :)