I am unable to make paging work in the Data View Web Part on SharePoint 2010. I selected a paging option in the SharePoint Designer ribbon, but it does nothing. Limiting the number of items, in the same menu, works fine.
Am I missing something?
I just did a very simple test. I created a Custom List with no additional columns beyond the Title and added 5 items to the list. Then I edited a default.aspx page (this is in my sandbox!) and added a Data View Web Part which simply shows the Title in Multiple Item View. Then I tried setting the paging to 1, 3, 5, all, etc. Every setting which I've tried works just fine.
I wonder what is different about your situation. What type of list is it? What type of columns are you showing, etc.?