I have added the following custom loop in my Wordpress template:
$args = array( \'category__not_in\' => array($featured_cat->term_id), \'posts_per_
Not near a wordpress system to test this out at the mo, but you should be able to use:
$paged = (get_query_var('paged')) ? get_query_var('paged') : 1;
(obviously defaulting to 1, if it has not been sent through).