I reinstalled and the problem is gone.
I currently have the same problem…not on the index page, just on the month archive pages (for example, http://www.spunkynomad.com/2009/11/). It was an issue for me before the update.
Here’s a static image of the problem: http://www.spunkynomad.com/wp-content/uploads/2010/01/calendar_widget_problem.jpg
Any help you can give will be greatly appreciated.