I recently upgraded to 2.o and my permalinks do not work anymore. I am running WP on a subdomain http://blog.xxxxx.com through GoDaddy. No matter what I do to the permalinks settings when I click on a link on the blog it just refreshes the page. If I set permalinks to "Default" everything works fine. I am also able to get permalinks working if I change the blog and WP addresses to http://xxxxx.com/blog (which follows the true directory structure).
Since I had permalinks working in 1.5, I think there must be a way to get them working in 2 while still referencing the subdomain. The only change I had to make in 1.5 was to go into vars.php and set $is_apache=1;.
Can anyone assist with this?