Display category products with pagination at magento cms page

Add the following XML to your Layout Update XML on your CMS page in:
Admin > CMS > Pages > Your CMS Page Name > Design > Layout Update XML

<reference name="content">
<block type="catalog/product_list" name="home" template="catalog/product/list.phtml">
<action method="setCategoryId"><category_id>your_category_id</category_id></action>
<block type="catalog/product_list_toolbar" name="product_list_toolbar" template="catalog/product/list/toolbar.phtml">
<block type="page/html_pager" name="product_list_toolbar_pager"/>
</block>
<action method="setToolbarBlockName"><name>product_list_toolbar</name></action>
</block>
</reference>

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