WordPress MU

I believe I have set up my wildcard DNS correctly but it isn't working properly.

Is it because there is a www in the domain? Please see the image for clarification:

http://img171.imageshack.us/img171/9821/addsite.jpg

Resolved: I simply removed the www in the wp-config. I wish they didn't include it during the set up Network phase.

They don't include in it purpose. The network setup detects your default server address.