Actually, that is a vanilla MC property.
Mobs that are located 128 blocks or more, away from an active player, will despair immediately.
Only time that it will work while you're offline is,
1. Some other player is within 127 blocks or nearer.
2. No one else is around.
After some thought, I guess what you're saying is, the Auto-spawner WILL work when the last player has logged off the server for the night? But as long as a single person is on the server, thousands of blocks away, the Auto-Spawner won't work? Very odd.
Thanks for the reply, just trying to get a handle on this. I guess I'd better keep a closer eye on the Cursed Earth mobfarm, perhaps that also isn't working when other players are on the server, even tho I thought it was working.
Also, I thought of another solution - don't log off the server, since the chunk-loader won't help me if I do... instead, I should stay logged in to the server and just go AFK for the entire night and leave my computer running. Lovely. I'll end up screwing up everybody else's Auto-Spawner setup if I start doing that every night. But that's probably what's going on - someone is going AFK instead of logging off, so none of our spawners are working. This sure is a weird vanilla mechanic when applied to SMP, but I certainly can understand the reasoning behind the mechanic.
I still swear it was not there in Monster because I would leave my base with a chunk-loader running (i.e. travel way outside the 128-block limit) and I would still get mob drops from the Auto-Spawner as well as my massive Cursed Earth grinder. But I was also playing SSP and not SMP, so perhaps that had something to do with it.