WordPress loop set to one category, but no pagination.

I used query_posts to specify that my index.php should only display the posts form category 1. Each page cannot have more than 4 posts and I have 5 to test pagination. The issue arises when I click the link to go to page 2 the navigation links change and the page reloads, but I get the same first 4 posts. LEt me know if oyu need anything else besides my index.php

<?php get_header(); ?>

<div id="container">
	<img id="detail" src="<?php bloginfo('url'); ?>/wp-content/themes/NJ History Makers/main/leftdetail.jpg" />
   	<h1>&nbsp;HM Blog</h1><br />

	<?php
		query_posts('cat=1');
		if(have_posts()): ?>

	<?php while(have_posts()) : the_post(); ?>

        <div class="post" id="post-<?php the_ID(); ?>">

			<h2><a href="<?php the_permalink(); ?>" title="<?php the_title(); ?>"><?php the_title(); ?> &raquo;</a></h2>

       		<div class="entry">

        		<?php the_excerpt(); ?>

                <p class="postmetadata">
<?php _e('Posted in'); ?> <?php the_category(', ') ?> <?php _e('by'); ?> <?php  the_author(); ?> on <?php the_time('l, F jS, Y') ?> at <?php the_time() ?> :: <?php comments_popup_link('No Comments »', '1 Comment »', '% Comments »'); ?> <?php //edit_post_link('Edit', ' | ', ''); ?>
				</p>

        	</div>

        </div>

	<?php endwhile; ?>

    <div class="navigation">
		<?php posts_nav_link(' ','&laquo; Previous Entries','Next Entries &raquo;'); ?>
	</div>

    <?php else : ?>

		<div class="post">
			<h2><?php _e('Not Found'); ?></h2>
		</div>

	<?php endif; ?>

</div>

<?php get_sidebar(); ?>

<?php get_footer(); ?>

</div>

</body>
</html>