I know I’m late to the game but I tried upgrading wordpress from version 2.6 to 2.7 today. I ran into the seemingly all-too-common redirect loop which seems to have to do with the wp-config.php keys and salts.
Thanks to a comment on the wordpress forums, I was able to find a resolution, which was to remove the block of KEYS and SALTS entirely from the wp-config.php file. Then, upon login, MU notifies you that your keys are incorrect and asks you to update them. A simple fix to something that I thought would be a major problem.
I have to say, WordPress 2.7 is significantly better than 2.6 AND 2.7 MU is even better than that if you are running multiple blogs. What fun!
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