The default LAMP installation on Ubuntu 6.10 server doesn’t include mod_rewrite module.
This module is required by WordPress MU.
I tried to install a WordPress MU on my Ubuntu server with LAMP.
To install mod_rewrite, run command as below:
sudo a2enmod rewrite
There is still another issue for WordPress MU installation. It is need a smtp service to send password to registered user.
If you do not have a postfix server on your Ubuntu, you’d better install this server first. Otherwise you can not active your account and your WordPress MU.