GIT_DIR used to work with git-1.4.4.4

sorry if I created too much (user) noise around this issue, but
this is mostly why as a user I refrained using git-1.5.x

I sometimes have a scm work flow where I'd like to have my
GIT_DIR sitting on another file system, so therefore not in
the current working directory.

I used to be able to do this in git-1.4.4.4:
(it's a rather useless example, I know)

mkdir /home/xian/vault
export GIT_DIR=/home/xian/vault
mkdir /tmp/xianwork
cd /tmp/xianwork
touch a b
git init-db
git add .

This was truly working, and now using git-1.5.1.4, it's not.

Instead I get: "fatal: add must be run in a work tree"

from the source code, I understand what to change if I
want to get the old behavior.

My questions are:
- is this new behavior truly needed ?
- is there another way to do this using newer work flow ?
( I know already about the symbolic .git link trick )

Thanks in advance for any useful tips.

-- 
Christian