Auto key frame button question [2.49b]

I’m trying to use Blender’s auto-keyframing feature but I’m not sure if I’m using it correctly. When I click the timeline’s record button and move a bone, nothing is recorded in the action editor window. However, there is an auto key mode option field which appears next to the button. When I select “Add/Replace keys” (other option is “replace”), the new key is recorded but the old key remains yellow, when it should turn white to show it has been deselected. Am I doing something wrong?