It does work for me on a clean WP 3.1.1 install, but you have to modify your theme.
Just check out the description on https://www.woothemes.com/support/wootumblog/ and alter the theme accordingly.
I used the Twenty Ten theme, but line numbers mentioned on that page are a bit off for WP 3.1.1 :
* loop.php, around line 130 :
Replace the <h2 class="entry-title">...</h2> line with <?php woo_tumblog_the_title("entry-title"); ?> and add <?php woo_tumblog_content(); ?> before <?php the_excerpt(); ?> and <?php the_content(...); ?> just below it.
* loop-single.php, line 26 :
Replace <h1 class="entry-title">...</h1> with <?php woo_tumblog_the_title("entry-title"); ?> and add <?php woo_tumblog_content(); ?> before <?php the_content(); ?> (around line 33).
