BuddyPress.org

Turns out I can get this problem to occur using a different domain, different version of WP 3.0 beta 2 (WordPress 3.0-beta2-14697), different Linux server, I can get this error when trying to activate BP 1.2.3. Now I just need to figure out how to resolve the issue.

Plugin could not be activated because it generated 2 characters of unexpected output

Has anyone else observed this activation problem?