Recently after the wordpress 3.0 update ,all sites which where running WordPress MU and buddypress in it faced a problem in which the images where showing a 404 page and not a single image was displayed on the site. Whenever you tried to click on the image it gave a 404 page.

I too got this problem in my Blogging Wire site which is a blogging network and it uses Buddypress plugin for creating a social network . I researched on the topic and found out that it was a .htaccess problem where some Rewrite Rules where having the old code.
My new code for the .htaccess file which helped me viewing all the files is :
RewriteEngine On
RewriteBase /
RewriteRule ^index\.php$ - [L]
# uploaded files
#RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]
RewriteRule ^(.*/)?files/(.*) wp-includes/ms-files.php?file=$2 [L]
# add a trailing slash to /wp-admin
RewriteRule ^([_0-9a-zA-Z-]+/)?wp-admin$ $1wp-admin/ [R=301,L]
RewriteCond %{REQUEST_FILENAME} -f [OR]
RewriteCond %{REQUEST_FILENAME} -d
RewriteRule ^ - [L]
RewriteRule ^([_0-9a-zA-Z-]+/)?(wp-(content|admin|includes).*) $2 [L]
RewriteRule ^([_0-9a-zA-Z-]+/)?(.*\.php)$ $2 [L]
RewriteRule . index.php [L]
After changing the htaccess images again showed up on the site. So, if you are having a buddypress problem,give this tip a try.
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I just installed 3.1 and had similar problem that i easily fixed but now whenever people respond to posts in the forums they get a 404 error. I hate upgrading.
No luck with the latest WPMU and BP 3.0…error is still there and a lot of people on the forums are complaining. I imagine a fix from them will be out quite soon.
works fine for me, thanks!!
Thank you!!! Problem solved for me!!