I am having the same issues, the problem is IIS6 does not support url rewriting use the free program and information here http://www.helicontech.com/ape/
I am getting there with my buddypress install but am not yet there fully as some of the links still don’t work, the create a group is one of them, its all down to writing the .htaccess file in the correct way to make all work.
I installed buddypress v1.2.1 as a plugin to my wordpress v2.9.2 install wordpress was and is working fine on my server, this is running on windows home servers own internal server which is IIS 6 I think, my hp mediasmart server is running PHP v5.2.10.
The problem I am having is with the nav bar and links that buddypress adds to wordpress, all links goto the page that says The page cannot be found.
I have setup wamp on my desktop pc, on this i installed wordpress & buddypress and both work fine and as they should do, but installing buddypress to my wordpress install on my hp mediasmart server has problems it seems.
