I upgraded to WordPress 2.1 today, and one of my plugins blew everything up. Here it is revised for WordPress 2.1. Enjoy!:

Download source code here

<?

/*
Plugin Name: PagerFix
Plugin URI: http://www.seoegghead.com/
Description: Makes the paging in WP more SE-friendly.

Author: Jaimie Sirovich
Version: 1.1 for WP 2.1
Author URI: http://www.seoegghead.com/
*/ 

function pager_fix($seperator = ' | ', $after_previous = '&nbsp;&nbsp;', $before_next = '&nbsp;&nbsp;', $prelabel='&laquo; Previous Page', $nxtlabel='Next Page &raquo;', $current_page_tag = 'b')

{    
    global $posts_per_page, $paged, $wp_query;
    
    posts_nav_link('',$prelabel,'');

    echo $after_previous;
        
    $numposts = $wp_query->found_posts;
    
    $max_num_pages = ceil($numposts / $posts_per_page);

    if ($max_num_pages > 1) {

        for ($cnt = 1; $cnt <= $max_num_pages; $cnt++) {

            if ($current_page_tag && $paged == $cnt) {
                $begin_link = "<$current_page_tag>"; $end_link = "</$current_page_tag>";

            } else {
                $begin_link = ''; $end_link = '';
            }
            
            $x[] = $begin_link . '<a href="' . get_pagenum_link($cnt) . '">' . $cnt . '</a>' . $end_link;

            
        }
    
        echo join($seperator, $x);
        
    }
    echo $before_next;
    posts_nav_link('','',$nxtlabel);

    
}

?>

The old documentation/blog post is here.