Index: wp-includes/query.php
===================================================================
--- wp-includes/query.php	(revision 3866)
+++ wp-includes/query.php	(working copy)
@@ -874,9 +874,14 @@
 			}
 
 			if (($q['what_to_show'] == 'posts')) {
-				$pgstrt = '';
-				$pgstrt = (intval($page) -1) * $q['posts_per_page'] . ', ';
-				$limits = 'LIMIT '.$pgstrt.$q['posts_per_page'];
+				if ( empty($q['offset']) ) {
+					$pgstrt = '';
+					$pgstrt = (intval($page) -1) * $q['posts_per_page'] . ', ';
+					$limits = 'LIMIT '.$pgstrt.$q['posts_per_page'];
+				} else { // we're ignoring $page and using 'offset'
+					$pgstrt = intval($q['offset']) . ', ';
+					$limits = 'LIMIT ' . $pgstrt . $q['posts_per_page'];
+				}
 			} elseif ($q['what_to_show'] == 'days') {
 				$startrow = $q['posts_per_page'] * (intval($page)-1);
 				$start_date = $wpdb->get_var("SELECT max(post_date) FROM $wpdb->posts $join WHERE (1=1) $where GROUP BY year(post_date), month(post_date), dayofmonth(post_date) ORDER BY post_date DESC LIMIT $startrow,1");
Index: wp-includes/classes.php
===================================================================
--- wp-includes/classes.php	(revision 3866)
+++ wp-includes/classes.php	(working copy)
@@ -75,7 +75,7 @@
 class WP {
 	var $public_query_vars = array('m', 'p', 'posts', 'w', 'cat', 'withcomments', 's', 'search', 'exact', 'sentence', 'debug', 'calendar', 'page', 'paged', 'more', 'tb', 'pb', 'author', 'order', 'orderby', 'year', 'monthnum', 'day', 'hour', 'minute', 'second', 'name', 'category_name', 'feed', 'author_name', 'static', 'pagename', 'page_id', 'error', 'comments_popup', 'attachment', 'attachment_id', 'subpost', 'subpost_id', 'preview', 'robots');
 
-	var $private_query_vars = array('posts_per_page', 'posts_per_archive_page', 'what_to_show', 'showposts', 'nopaging', 'post_type');
+	var $private_query_vars = array('offset', 'posts_per_page', 'posts_per_archive_page', 'what_to_show', 'showposts', 'nopaging', 'post_type');
 	var $extra_query_vars = array();
 
 	var $query_vars;