Update 25th Aug. 2011: the bug discussed here is still present. I recommend all WordPress Multi Site users install the Proper Network Activation plugin that is available here at the WordPress site.
I noticed a compatibility bug between WordPress 3 Multi Site and Greg’s High Performance SEO so reported the issue to Greg who very quickly took a look at it. It turns out that WordPress Multi Site does not like it when plugins are Network Activated. So, as a warning to all WordPress Multi Site users, do not Network Activate plugins. Not yet, anyway.
To paraphrase Greg’s explanation:
When a plugin is Network Activated, WordPress 3.0 ignores the activation hook that plugins register to run whenever they are first activated. Consequently a plugin’s default options do not get set-up on subdomains when a plugin is Network Activated. It also appears, according Greg, that WordPress does not fully remove plugins that fail to setup across subdomains when Network Activation fails – the database does not get properly cleansed.
I recommend WP 3 MS users do not Network Activate plugins until the WordPress developers fix their oversight.
In the meantime, if, like me, you need to remove a Network Activated plugin that only half installed then you must delve into your WordPress database and remove its settings manually before you re-install it. Affected plugins must then be reactivated on a per site basis. For Greg’s High Performance SEO, this means you must drop the single “ghpseo_settings” entry in “wp_n_options” (it will be repeated in your database as many times as you have sites).