I think that's because I replied to the last comment

 

instead of the original post.

checking to see if that's true

 

replying to original comment

Correct, but when I reply to the original comment, it displays incorrectly, newest comment on top.

Many thanks to sun, had to change comment display to FLAT and there are a number of settings for EACH content type, forum, blog, etc. http://trado.info/admin/content/types