Re: Setting up access to admin correctly for a BP network site
Your site definitely does not look as though it’s set up correctly, ‘blogs’ should list all your member blogs not direct to a 2010 undefined blog.
I would suspect that .htaccess is not setup correctly and /or the necessary wp-config changes required for MS added. When you set up the MS network did you follow all the steps exactly and add the new lines shown to you for .htaccess and wp-config? I have messed around with a WP 3.0 subfolder install but cannot replicate what you are describing or that I saw occurring on your site, however removing the .htaccess files does mean that subfolder sites resolve to main site index so I suspect this is the issue.
In case plugins are playing a part in the issue, it might be best to disable/deactivate all but those absolutely necessary i.e BP then see if things change, if they remain the same , compare your .htaccess file to that which should be shown under tools > network in the main dashboard.