Well, I don't know how, but I did it...
I used the http://buddydev.com/http//buddydev.com/public-download/cc-remove-blog-slug-v-1.1.zip plugin, and as best I can remember, it did NOT appear to work.
Ah, the plot thickens...
Of course, I followed some instructions, somewhere, that said to copy your custom permalink structure from out of the little box, and save it somewhere, then select the default option, and save. This with the above plugin installed (as super user/network admin) and activated.
The next step said to then put your custom permalink code back into the little box, and save again. I did that.
Tested the post links, still had /blog in them, and when deleting that string, got the "404"...
Okay, so I figured why keep this plugin, if it don't work, right? So I go back to network admin, deactivate, then delete.
So, now I'm thinking I don't want /blog in my url, so I'm guessing "pages" are the way to go (and some say that is so, but I'm not going to debate that here). So I go and copy paste the post, to a page. All is well...
Later on, after dinner, I come back to the blog, as the post/page wasn't finished. Amongst doing other things, and still having the "Hello World" post in the list, I click on the view link (I had modified the post, instead of deleting and creating a new one), and voila, the /blog seems to have disappeared, and trust me, it had been there before!
So, I ADD the /blog part back into the url, and... it gets stripped on hitting the enter key, and the post loads. Wow!
I'm guessing I just fixed (or broke) something, and eliminated the /blog from my root multisite (3.1) blog... ;)
And, on further testing, the /blog is NOT in newly created posts...
Things that make you go Hmmmm...