Did you check your mail options settings in mu?
yourdomain.org/wp-admin/options.php
mailserver_login
mailserver_pass
mailserver_port
mailserver_url
They happy?
So here’s the weird thing now. I tried registering on the site with different email addresses; including hotmail, gmail, yahoo, ones I host, and ones hosted at various hosting companies. None of them receive and email. If I grab the activation key from the database and manually type in the activation URL, then that user is activated and then sent the activation email, along with any followup emails.
I had two friends try it, and it worked perfectly for both of them.
I got a hosting account the other day with asmallorange just to play with buddypress, so I’m not able to check the mail logs without submitting a support ticket to their tech support, so I have no clue whether the emails in question are actually leaving the server.
I’ve had a problem similar to #1. The email is actually sent but the recipient’s email server just blocks it. They never get it. It doesn’t get sent to ‘spam’ like gmail or yahoo. They just don’t get it at all.
hotmail
Right? Try complaining to Microsoft. 
Thanks apeatling. I downloaded the trunk from svn and #2 is fixed now.
There was a bug with blog signups where they would be private not public. This has been fixed today. That would explain your second problem. The first I’m not sure, has anyone else experienced this?
Does the link in the activation email have the right domain in it?
