Yup, the volume keys are of absolutely no function unless in the media player.
i.e. in the media player pressing up will increase volume and holding it will move to the next track. pressing down will decrease volume and holding it will move to the previous track.
if I am not in the media player, say on the home screen, message screen or on lock, then the volume keys are completely useless. They won't increase or decrease volume from pressing or change track from holding.
The phone was fully functional pre-update and it is only after the update that this has happened.