Hmmm … I have other buddypress and wordpress mu plug ins, not much but few.
When I downgrade to Version 1.2.3 of buddypress things work okay.
But using the 22.214.171.124 version causes problem. Did they introduce some bug somewhere ? ( Maddening for me!)
Have you got a working site with BOTH buddypress 126.96.36.199 and WordPress -mu-2.9.2 ? Any web link please ?
Buddypress is activated sitewide. User uploaded photos show up across all activity streams. Except in wordpress mu blog posts and comments. Not sure whether this is a problem with the latest Buddypress.
Are you using the latest buddypress ?