npm install locally

In the past when I installed packages using npm(>=1.0) they would be installed locally, but not anymore.

My setup:

• First I use nvm to install node.js.

• My operating System:

  alfred@alfred-laptop:~/node/so/6513101$ cat /etc/lsb-release 
  DISTRIB_ID=Ubuntu<br>
  DISTRIB_RELEASE=10.10
  DISTRIB_CODENAME=maverick
  DISTRIB_DESCRIPTION="Ubuntu 10.10"
  

• My node version:

  alfred@alfred-laptop:~/node/so/6513101$ node -v
  v0.4.8
  

• My npm version:

  alfred@alfred-laptop:~/node/so/6513101$ npm -v
  1.0.15
  

Installing random package

alfred@alfred-laptop:~/node/so/6513101$ npm install notifo
notifo@0.0.2 ../../../node_modules/notifo 

In the past it would install into the same directory but it does not install in the same directory anymore. is my npm/node.js broken or am I missing something or does npm not anymore install local packages(inside same folder => ~/node/so/6513101/node_modules) which I thought was a cool feature because I could bundle all my dependencies so that other users did not have to install npm to use my code(I still believe users should install npm because it is a great product). The bundle command is gone so I can't use that? Could someone please explain to me what is going on?