This may be a problem deeper than what I'm aware of, but here are the symtoms:
1.) I have custom error pages (not WP template, but my own personal script) defined in .htaccess that have worked until the 2.0 upgrade.
2.) Permalinks still work on my site even though WP's new rewrite rules are only 7 lines long...
3.) When you go to a page on my site that does not exsist, instead of getting my custom error page (that outputs correct 404, 403, etc headers) - you get the WP 404.php error page which always outputs "Unknown Error" in the header. -- This is a problem because if it's a spider hitting the page, they'll never learn that the page does not exsist.
For example, you can go to http://ielliott.com/anything_you_want/ and you'll see the Unknown Error message which is my theme's 404.php file.
I hope there is some type of a fix for this, as I can see it becoming a big issue in teh long-term.