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I have the same navigation problem in one of my production sites - it's a hosted environment, so I don't have much control over it. Redhat Linux, Apache 1.3.27, PHP 4.3.0.
I've done file/folder comparisons using WinMerge on the hosted site and another of my sites, and I find no differences (other than host specific). No amount of updating, upgrading the module and regenerating templates has changed anything - the spotlight shows when you first load the page, but selecting another tab breaks the spotlight and any further tab navigation.
A search of news_top.php for PHP functions and comparing those to the changelog for PHP results in the following functions that had fixes in 4.3.9: array_slice, array_merge, isset, and sprintf.
Love the module, and for now, I'll use the classic view until I can get the host to upgrade PHP.
Steve
[edit]
On one of my test servers (Windows 2K, Apache 2.0.44. PHP 4.3.1), the navigation is working fine... I load PHP as a module instead of CGI. I guess I'm still unsure why it doesn't work.