So my first question is, did I stop generating bitcoins just because the population of users exploded or was it because my version was out of date? (I'm assuming the former.)
Both are partially correct. 1) As more bitcoins have been discovered due to the increase in miners, the difficultly of mining new blocks has increased significantly. 2) All the serious miners are now using GPUs instead of CPUs to mine blocks. GPUs are approximately 100 times faster at mining depending on the CPU/GPU.
The new version of the client (0.3.22-beta) doesn't seem to allow me to turn generation on and off and doesn't seem to give me the option to set the maximum number of cores to consume.
The most recent version of the Windows client removed the option to generate coins. A typical CPU might do 2Mhash/sec, which means on average it would now take 14101 days to generate one block of 50 BTC. If you want to do CPU mining, I suggest joining a mining pool.