http://codex.wordpress.org/Before_You_Create_A_Network

If you scroll down to the bottom you see:

You cannot choose Sub-directory Install (for a path-based network) if your existing WordPress installation has been set up for more than a month, due to issues with existing permalinks. (This problem will be fixed in a future version. See Switching network types for more information.)

I believe that this is causing some of the permalink issues I am facing here. But I would like to understand why there is a one month time limit and what they are doing to fix it. For instance the permalink issues I am having - I definitely notice that the newer WP installs that I have on my server are not having issues while the older ones are. What the $%%**% is happening at the one month time period that is "locking" permalinks?