If i understood you correctly, our problems seem to be quiet identically…
I also used a custom theme, where i couldn’t see any new functionality after activating the plugin but…
1. i changed to bp-default theme
2. called the activity page and the functionality appeared
3. found out that my function.php (custom theme) is loading the …jquery/1.4.2/jquery.min.js from ajax.googleapis.com but the bp-default calls a 1.7.2 version
4. changed 1.4.2 into 1.7.2 inside my themes functions.php
Et voila! Functionality works now with my custom theme, too.
Seems to be a jquery issue… I’m not a good programmer, but i’m very happy with this solution working for me…