I've always understood it to be top-to-bottom...
Regardless of orientation, & regardless of orientation/s the app supports.

IIRC that's what Felipe was aiming for in his blog post just prior to the N9 being released:
http://felipec.wordpress.com/2011/08...sane-behavior/

Pretty sure he outlined why he felt it's best that way (IIRC it was mostly in the comments).
So perhaps Nokia just didn't have time to implement it till 1.1?

It appears some @TMO don't agree with his rationale though.