WordPress MU

ok heres strange one, after having not to much luck with mu and subdir's i got hostgator to use subdomains. the wildcard seems to work good.
but.
after installation everything seems fine.
until you create a new user.
after that when you go to http://www.burnthedancefloor.co.uk/blog
the login under meta has last created blog as url prefix.
ie (test.burnthedancefloor.co.uk/blog)
and when you try and use it to login it just loops back to the blog.
I also notice that the template is not loading.
infact thee css is being called wrong from the subdomains.
source of subdomain blog

<link rel="stylesheet" href="http://burnthedancefloor.co.uk/blog/wp-newblog.php/wp-admin/wp-admin.css" type="text/css" />

so,
Im asking a few questions here.

1 how come that the admin and log in/logout allways uses the url with prefix of last blog created?

2 how come the css url is wrong?

any ideas?

thanks

well one problem i found is that each user page/sub domain, is being created with 'site_url' with wp-newblog.php as its homepage.
weird, where can i reset this value universally?

having changed the site url in the user options, im sql tables, When creating a new blog it still appends wp-newblog.php onto the site_url.
any ideas?

I have the same problem every now and then, havent found a fix for it yet other than closing the browser and using a different one, great fix huh? LOL

indeed haha, any body got any ideas???

guys my advice is to use older release