404 Error when a user creates a new site

Hi, I was testing the pro sites plugin at http://www.catholicus.me. I tried to create directory.catholicus.me and it all went great until the time of confirming my e-mail. I received this email:

To activate your blog, please click the following link:

http://directory.catholicus.me/wp-activate.php?key=4f7fad78ffba3c0a

After you activate, you will receive *another email* with your login.

After you activate, you can visit your site here:

http://directory.catholicus.me/

When I click on activate, I get a 404 error message. Then I erased the directory. part of the activation link and that activated the site but, lo and behold, when I visit directory.catholicus.me I still get a 404 error message. Please do advice. Thanks!