Yes, due to limitations in the query tree design, PG 7.0 and prior versions apply the "order by" only to the first clause of the query.
There's no easy way around it. Two queries, I guess, instead of one, ugh.
The query tree has been redefined in PG 7.1, and now handles such queries perfectly. I've been able to get an OpenACS 3.2 installed and working on PG 7.1 from current (as of last weekend) sources from the CVS tip. It will beta very shortly. You might consider picking it up as soon as it does if you're planning on using the intranet module.