OK: That does not sound good, so back to basics then. Here is a test file.
Perhaps the problem lies in how I am defining my keys.

% with MKII the output is fine, but no contrastcolor
% with MKIV subentry/subsubentry are not placed properly

\setupinteraction[state=start,color=blue,contrastcolor=red]
\setupcolors[state=start]

\setupregister[index][n=3,
balance=yes,
pagestyle=italic,
textstyle=normal,
criterium=all,
interaction={pagenumber},
]

\setupregister[index][indicator=no,distance=0.5em]

\setupregister[index][pagecommand=\it] %needed with MKIV

\starttext

Throughout the millennia \index{humans}humans have
\index[humans]{humans+development}developed and
\index[humans+development]{humans+development+adaptation}adapted methods
for storing facts and
thoughts on a variety of different media.
\page
Throughout the millennia \index{humans}humans have
\index[humans]{humans+development}developed and
\index[humans+development]{humans+development+adaptation}adapted methods
for storing facts and
thoughts on a variety of different media.

\blank[3*big]

\placeindex

\stoptext


On Sun, Mar 18, 2012 at 5:17 PM, Wolfgang Schuster <
schuster.wolfgang@googlemail.com> wrote:

>
> Am 18.03.2012 um 22:11 schrieb Alan Bowen:
>
> > Sorry for the bother, Wolfgang. I think I have the answer now (see my
> message earlier by about 30 seconds). I had not realized that the textstyle
> key in \setupregister could take a command for positioning the head as well
> as its actual style.
>
> You textstyle key accepts commands because it has to accepts \ss, \bf etc.
> and you misuse this for something different.
>
> Wolfgang
>
>
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