In link-template.php of the WordPress MU install, get_pagenum_link() contains a bug appending additional information to the page numbered links.
For example:
If the URL of my MU blog reads http://dev.mydomain.com/myblog the function get_pagenum_link() will return http://dev.mydomain.com/myblog/myblog/page/2
The expected functionality should be to return http://dev.mydomain.com/myblog/page/2
This issue has only been noticed with MU.