I was having this problem as I was upgrading the plugin to 0.7. What I had to do was deactivate all my plugins and I found one that was rewriting the URL.
What you need to check for is wherever you are displaying search results, make the the search is in the URL. For example if I search for “foo bar”, at the end of the URL you should see q=foo+bar. if that isn’t the case, something is rewriting your URL.
If it isn’t that, post more details and I’ll see what I can do to help.
