The datetree functionality for org-mode capture is very appealing but
google has let me down trying to get it working.

I set it up using
http://members.optusnet.com.au/~charles57/GTD/datetree.html as follows:

template entry:
("e" "Event" entry (file+datetree "~/notes/events.org")
 "* %^{Title} %?
")

My versions are:
(emacs-version)
"GNU Emacs 24.1.50.1 (i486-pc-linux-gnu, GTK+ Version 2.20.1)
 of 2012-07-28 on kutjera, modified by Debian"
(org-version)
"Org-mode version 7.8.11"

Starting with a blank events.org file, the current year month and today are
generated as the tutorial describes but all entries appear under it,
whatever year or month or day I actually set for them  using C-c, C-s to
schedule a date (or by just associating a date with them).

* 2012
** 2012-09 September
*** 2012-09-03 Monday
**** test for tomorrow again
SCHEDULED: <2012-09-05 Wed>
**** TODO try me as a task for tomorrow
SCHEDULED: <2012-09-04 Tue>
**** test2
<2012-11-03 Sat 10:31>
**** test1
<2012-09-03 Mon 10:30>
**** just one date perhaps
SCHEDULED: <2012-09-04 Tue>

Can anyone help with what I'm doing wrong or is this a feature that is no
longer working?

Cheers,
Paul