Can anyone point me in the right direction here please? I've put up a test site (basic 1.2.1 install of WPMU at http://www.shamrogue.com) and when I create a new blog (either from the admin panel or the link on the home page) it seems to work, but if I try to view that blog I get a 404 error.
Any suggestions?
Well, I don't see any new blogs that have been created on your install. And you don't give us any details. Can't really help unless we get to see what you're seeing.
What details do you need?
I tried to create shop1.shamrogue.com via the Admin menu, and then I tried shop2.shamrogue.com via the home page. Both seemed ok but when I try to view them (e.g. http://shop1.shamrogue.com or shop2.shamrogue.com - they don't exist.