WordPress MU

Hello everyone. I have Wordpress MU set up on our site. Mostly everything is working great. However,

When people try to signup for blog, it sends them verification link properly, like:
http://sweaterdoves.com/blogs/wp-activate.php?key=1d838ec2081baa3f

When they try to signup just for username it sends link like:
http://sweaterdoves.com/wp-activate.php?key=ad5ebe3d5c59639c

Looks like its missing the /blogs/ directory from the config file there.. though its setup all properly..

Any help would be greatly appreciated!
Thanks,
Davina

This is exaclty what I'm experiencing too (as a matter of fact, I posted yesterday about it, albeit a slightly different approach... http://mu.wordpress.org/forums/topic.php?id=4189&replies=1 ) I would love to know how to fix this