This may be a problem deeper than what I'm aware of, but here are the symtoms:
1.) I have custom error pages defined in .htaccess that have worked until the 2.0 upgrade.
2.) Permalinks still work on my site even tho 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.
A note: this is not a WP 2.0 beta install - it's the full version downloaded a couple days ago... I wasn't aware this support forum was closing until after I posted... can moderators move it?