I'm using Simple Sitemaps 1.0.4 on WPMU 3.1.1.
The issue I am seeing is that sitemaps are only being generated for posts that were written natively in WP.
I do a lot of work where I import an existing blog (sometimes with thousands of posts), but those posts are not reflected in the sitemap.
Here is a link to the sitemap: http://www.litigationandtrial.com/sitemap.xml
and you can see it only shows posts in random order starting on 6/15/2011, when the site has content going back several years.