When upgrading WordPress MU installation to a WordPress 3 multisite installation, I faced a lot of “Internal Server Error” problems, such as:
Premature end of script headers: *.php
an error occurred while processing this directive
A lot of people suggested disabling plugins before, or even removing them all from the /wp-content/plugins/ folder. But one crucial detail was missing from most of these suggestions. WPMU keeps a special set plugins for itself in the folder /wp-content/mu-plugins/. It is very important to disable these, because chances are these are the most “incompatible” plugins that you have (because they are not updated like the regular WordPress plugins).