Custom Taxonomy not working with posts_per_page in new WP_query (pagination problem)

should it be..

$paged = (get_query_var('page')) ? get_query_var('page') : 1;

WP_Query in codex:

Pagination Note: You should set get_query_var( ‘page’ ); if you want your query to work with pagination. Since WordPress 3.0.2, you do get_query_var( ‘page’ ) instead of get_query_var( ‘paged’ ). The pagination parameter ‘paged’ for WP_Query() remains the same.

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