Is the Astronomy community still concerned about the lumpyness of matter distribution in the universe? A decade or so ago, when I was still a science undergrad, one of the open questions in astrophysics was to explain the uneven distribution of galaxies in the observable universe.  That is, why did the universe look lumpy instead of evenly distributed.

Is this still an open question, and if so who is working on it?
The "lumpy" distribution of galaxies in the universe is now well understood.  In the current cosmological paradigm, the very early Universe was seeded with fluctuations in the distribution of matter and energy.  Some regions of the universe happened to be slightly more dense than average, and some happened to be slightly under-dense.  

Over time, these perturbations evolve.  Gravity, for instance, will cause the initially over-dense regions to become more over-dense.  When galaxy formation occurs, it usually happens in the dense regions where there is more material with which to form galaxies.  Therefore, galaxies will tend to trace (to some degree) the underly fluctuations in the matter density.  

In short, the lumpy distribution of galaxies results from (a) the initial density fluctuations set down in the early universe, and (b) the evolution of these fluctuations according to well known laws of physics.  Cosmologists frequently model the lumpy distribution of galaxies using, for instance, numerical simulations or theoretical models; we find that these models agree extremely well with the observed distribution of galaxies in our Universe.  In fact, measurement of the galaxy distribution is used as a powerful tool to test and constrain our cosmological models.

Of course, the above answer doesn't explain the process responsible for laying down the initial density perturbations.  One theory that attempts to address this question is called Inflation.