I am sure you are doing something wrong.  I am not even sure what you are talking about.  The documentation explains things and assigns different views a proper teminology that you could use to communicate here.  I assume what you are talking about is when a moderated hits the moderate navbar button.  This takes them to the moderation queue.  Here it lists all forums that have posts to moderate which the moderate is a moderator of that forum.  If this is what you are talking about, then your problem is you don't have the moderators assigned to forums.  Someone is only a moderator when they are assigned to a forum.  If I am off base I need more information from you.

Cyberherbalist I suspect you are getting the steps out of order. 

You have to create or give a user the moderator roll first. This give the next step something to put in the drop down box.  The following the directions in the documentation create or edit a forum.  Under general settings is a checkbox IS Moderated.  Check that and the screen will refresh to show a new row with a textbox for Moderators with a folder and delete icon next to it.

click the fold icon and  a short while later (it's a little slow) a new window will open.  Just leave the defaults and click the go button.  In the top window all of the users that you have given the moderator roll will be listed. The bottom window has the users that currently can moderate the selected forum.  To add a user highlight the name and click the add button. Click ok when you are all done and the user will now appear as a moderator in the text box.  Save your changes and you should be good.

Now test it as a user that can only post.  You'll get the moderated forum message after you post. Log back in as the user you gave moderate permissions to the forum to and take the option to moderate.  You should see a list of posts that need your attention.  The buttons there are pretty self evident.

Good luck and have fun.  :)

Cheers,