On a brand new installation of WordPress 2.1.2, I have also problem with the permalink. Strangely they do not all work…
What does not work is any custom permalink which does not start by /index/ or /index.php/.
So if I use /index/%category%/%postname% the permalink is working, I mean that when I click on an article, page, etc. I actually see it.
If I use /%category%/%postname% the permalink is not working. On the front page, the link seems to be correct to a post (http://myserver/wp/category/article) however if I click on the link I get a 404 error.
I have PHP 5.2.1 and I’m not planning on downgrading it, my path is to upgrade it always 😉
So for the time being, I’m using the /index/ prefix for my permalinks, but before I put the site on production, I hope this issue will be fixed…
