BuddyPress.org

Aaargh. This is nothing to do with buddyPress. The installation instructions say to check you have a fully working install of WPMU before installing buddypress. Obviously you didn’t.

Therefore a more appropiate place is the WPMU forum or website for this question. However: you need wildcard domains like you’ve said. Your webserver also needs to be configured to support such a thing. In Apache httpd, this is called a “virtualhost.”. Talk to your host.