OK, this is new to me and I didn't see this in my search. I used the new blog creation feature in the admin area to create a new blog and user at the same time. The blog was created as was the user. I (admin) got the e-mail about blog creation but the user didn't get any e-mail and their address is on a different domain than wpmu. Also the new user was added as an admin to the main blog domain.tld, a very uncool thing.
The e-mail thing is troubling but the fact that the new user was made an admin on the site blog is not good at all. I need to see if anyone else has experienced this before creating a ticket. I am on r702 with vhosts and the main site is blogs.domain.tld.