Multi site plugin

Have installed the multi-site widget and believe I have done so correctly. I can create new sites and edit them. However when I click on the link to go to the new site, I get "website cannot be found". I looked at the edit>settings screen and saw it was supposed to be writting this info to a wp-content/blogs.dir/3/files directory. When I look at that directory on the server blogs.dir is empty. It appears that the infomation is not being written to this directory. So, the site cannot be found. Please advise