An update on the above:
My .htacess looks something like this:
# BEGIN WordPress
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
# uploaded files
RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]
# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]
RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule ^[_0-9a-zA-Z-]+/(wp-(content|admin|includes).*) $1 [L]
RewriteRule ^[_0-9a-zA-Z-]+/(.*\.php)$ $1 [L]
RewriteRule . index.php [L]
# END WordPress
which is the recommended default settings for Wordpress 3.1 Network.
The SME Server /var/log/httpd/error_log reports
[Sat Apr 16 17:29:35 2011] [error] [client 192.168.x.x] File does not exist:
/home/e-smith/files/ibays/Primary/html/wp-admin, referer:
http://my.smeserver.local/wordpress/wp-admin/network/sites.php
Which suggests that the issue is that the rewrite rules for the ibay is being ignored and that the wordpress rewrite rule is taking precedence and using / as its root which is interpreted as the Primary ibay which does not have wordpress.
The Wordpress 3.1 Network option uses directory virtualisation to create the sub-directory blog sites and while the site works the admin area does not.
Magic Apache Rewrite voodoo is in play ?
cheers
Tony