Re: home page = blogs (how do i fix??)
I think the lesson here is don’t install WPMU in a subdirectory (in your case URL/blogs). If you think about it, without Buddypress plugins installed you already have the permalink URL/blogs going to your main install. Now, with the Buddypress plugins installed, you’ve duplicated that link because it too goes to “URL/blogs”. Do you see what I mean?
I believe if you install WPMU in the root of your site the problem will go away. Alternately, try changing the name of your subdirectory to anything but “blogs” and you’ll probably be OK.