What happens in FireFox?
If it is the same behavior, then please answer these questions to allow us to help you better.
Everything work fine in FireFox and Safari. Its an IE problem.
1. version 2.8.4a WPMU
2. WPMU as a directory
3. install, is it in root
4. fresh install of WPMU
5. installed Buddy Press without testing WPMU first
6. version of BuddyPress 1.1
7. fresh install of BuddyPress
8. ALL plugins have be deactivated
9. using the standard BuddyPress themes
10. did not modifiy the core files
11. No custom functions in bp-custom.php?
12. not running bbpress
13. the page just goes blank at login on IE7
You can try use another template or theme to see if the problem is the same as a default theme? I think on buddypress.org there is another bb 1.1 theme that is available for you to download.
If it doesn’t work on the default BuddyPress theme that comes with BuddyPress, it’s not going to work on third-party themes.
13. the page just goes blank at login on IE7
If you look at your web server/php error log when this happens, is any message given? Also, if you disable BuddyPress and log in on IE7 via http://yoursite.com/wp-admin/, does that work?