BuddyPress.org

I am using WPMU 2.7.1 and Buddy Press 1.0-RC1.

I assume you mean BuddyPress 1.0, the public release version. If you truly are using 1.0-RC1, then I’d advise you to upgrade to the public release version when you get WPMU functioning properly.

If you are upgrading from RC1, use these instructions.