Just tested and it's working fine, @AlexWright:
PS: the video is a bit longer (5:53 minutes because I downloaded the plugin, installed it,, configured, etc.); if you want to straight to the point, go to 2:15 minutes.
I selected only Blog Entries and created a topic, status updates, status update reply and finally, a blog entry; And as expected, I received only the notification for the blog entry.
Disable all your other apps/plugins for a moment that has something to do with notifications and test it alone.