Jono, I wasn't sure of this (though this is how my 2 G's work--altho' occasionally popping up the magnified version if I just touch the focus ring while in AF), but checked the manual and I 'think' I'm correct.
I don't think the magnified version with touch of focus ring is supposed to pop in unless you have MF set instead of AF. I looked up AF/MF and it just says that you can tweak MF after AF--nothihg about MF assist. Howver, if you have MF assist on, if you are shooting in AF, you can use MF assist (as you can with MF lenses by clicking on left 4 way button and then OK. I won't cite pg. numbers since I've closed the manual now LOL, but that seems to be it.
Edit: Gosh--that sounds convoluted LOL--simply, you use AF (with AF/MF on) as is, but can MF with it to tweak. To use MF assist in AF---you have to use the 2 button. If you set the camera to MF (with AF/MF button on back), then the magnified version will automatically work with focus ring touch.
Diane