/%postname%/ pages aren’t working after upgrade to 2.8.1

I upgraded to WP version 2.8.1 and now all my /%postname%/ pages aren’t working. They forward to my 404 page. If I change them back to the default link such as ?p=123 they work again and I can see my pages.

But all my links on my sidebar and within my pages are directed at /%postname&/ and I really don’t want to go through changing them all because I like the title as the link. I’ve been trying to figure this out over an hour and for the life of me I cannot figure out why it won’t let me use the postname. Does anyone know what’s wrong with it?