Custom post type archive 404’s with paginate_links

Martin’s fix works, but a better solution is to use the pre_get_posts function.

Example:

function custom_type_archive_display($query) {
    if (is_post_type_archive('custom_type')) {
        $query->set('posts_per_page',1);
        return;
    }
}

add_action('pre_get_posts', 'custom_type_archive_display');