Subfolder blogs has no theme or styles, cannot login to backend – in this case it really is
an issue with mod_rewrite not reading the .htaccess file properly. You may need your
webhost to add this line in their Apache httpd.conf file:

AllowOverride FileInfo Options

DB errors – if the main site works and additional sites show a database error, this
usually means the extra tables were not created. Make sure the database user has ALL
permissions on the database.

“My subfolder sites don’t work / have no styles / are not in folders on the server. What’s going on?”

Subfolder sites work on the same principle as pretty permalinks do. The URL is rewritten to give the appearance that it is in a folder on the server. So, mod_rewrite has to be working on the server, and actually reading the .htaccess file. It’s the .htaccess file that does the heavy lifting of “making” the subfolder site in this case.

For either kind:
The blogs themselves are virtual. They do not exist on the server. I’ve answered a few threads about the blogs.dir folder that needs to be made on the server when you enable multisite. This folder does not hold the actual blogs. The only use it has is for media uploads from each site. If there is nothing in the folders under the blogs.dir directory, that has no relation to if the site itself shows up or not.