If you have set your wordpress mu site to sub domain and you create a blog you will get a 404 error.
unless you make a sub domain .
Goto your cpanel
open your file manager
goto your wordpress directory and find the file wordpress-config.php
find the line
/** The Database Collate type. Don't change this if in doubt. */
define('DB_COLLATE', '');
define('VHOST', 'yes');
Change the yes to no
define('VHOST', 'no');
save the file and make a new blog
thanks to this dude to sharing the tips
http://welcome.totheinter.net/2009/05/06/changing-wordpress-mu-from-subdomains-to-subdirectories/