Im trying to setup WPMU on a fresh Macbook Pro running Leopard and I seem to be having a similar problem, users can't signup either to create blogs or as 'just users'. I don't get any error message, I just can't get past wp-signup.php
I checked the Apache error log and I get this error every time I try to register
[Tue Apr 22 14:54:54 2008] [notice] child pid 783 exit signal Bus error (10)
Now I don't know Apache at all so this is a mystery to me. I will say that I've tried installing WPMU a few times to check wether using subdomains was the issue. It's not.
My gut tells me this is a Leopard problem (and god knows there's a boatload when it comes to web dev on Leopard).
I'll keep chipping away at this and try to find a solution. I just thought I'd mention it here incase that Apace error means anything to anyone.