Re: Problem uploading an avatar
5. Was WPMU functioning properly before installing/upgrading BuddyPress?
What wasn’t working properly? You can’t expect BuddyPress to work if WPMU wasn’t working properly first.
I think this error relates to not being able to manipulate files in /var/www/html/SITE/wp-content/blogs.dir/. Hmm.
With regards to what group/user your web server runs at, if this isn’t your own server, your host can help. Where are you getting hosting?