I just went farther with your solution to the members theme issue. Activated the newly created members theme even though it was blank in the preview window. It worked! The link buttons at the top of the page, Blog, Groups, Members,Blogs,and Home, broke as the username was inserted into the links. Hard coded the links in the header.php and that fixed that.
I just installed BuddyPress v 1.0 2 days ago to a new WordPress MU install. Got it running fine except for the member blog theme thing where members have the default WordPress MU theme. I followed your instructions above and copied the bphome theme, changed the theme name, changed the style.css file header name from home to blogs and deleated the home.php file. I moved this new theme to /wp-content/themes folder and activated the theme. But when I go to a members dashboard and click on the theme to activate it, it comes up blank in the preview window.
