There is a bug in the version of Velocity that Confluence is currently using such that it will actually set the value of the variable to the last non-null value of the variable if you try to set the variable to null. This is especially nasty when you are doing things in a loop in a velocity template within Confluence. This bit us and could end up biting a good number of people.

How this bug affects Confluence users is described here:
http://jira.atlassian.com/browse/CONF-9457 (was closed as "won't fix" since it is a velocity bug and not a Confluence bug)

The description of the Velocity bug with sample code is here:
https://issues.apache.org/jira/browse/VELOCITY-186

Matt said that upgrading to Velocity 1.5 would fix this.

Thanks!