Mike, I'm with you! This doesn't seem to work in 10.1, although it did in 10.0. Now the clipping options referenced take out all other features outside the data driven page polygon features, instead of highlighting them as before. Here's a page done previously, with a nice highlight of the current feature.
[ATTACH=CONFIG]17370[/ATTACH]
Then, take a look at this one with the current set of polygons that I'm cycling through, but you can't tell which one is the selected one for the current page.
[ATTACH=CONFIG]17369[/ATTACH]
Edit after finding solution: You've got to make a duplicate copy of the index layer, then in the Properties / Definition Query set a Page Definition and change the attributes of the layer to make it as visible as you'd like.