This entry was from 2007 (original message was left with a strike-through font). The process has changed and this message has been edited in 2012. See most recent replies below.
I think everything is working properly for the favorites. It's accessed off the "Public Diaries" menu bar at the upper left of each screen. To start, you go position your mouse over "Public Diaries", then it should show a new menu entitled "Favorites", position your mouse over it and it should open a new menu with your listed favorites in it. Of course the first time you access it, it will just list a menu option entitled "Edit Favorites", click on it and it should transfer you to a screen with several dropdown boxes with lists of the most recent 500 users to have posted. After you've chosen the ones you want, click on the "update" button. It should then transfer you back to the homepage. Now see if they are accessable in the top menu. When you click on the username of one of your favorites it will take you to the public diary page and list any entries that they've made in the last 7 days. There are a few limitations on the favorites option at present. The available users to choose from only include the most recent 500 posters and the total number of favorites is currently set at 10. Try things out and let me know if you encounter any problems.