WordPress MU login endless loop

I have installed WordPress MU 2.8.4. The installation was successful and I received my username and password.

The problem is that when I tried to login using Internet Explorer ver. 8, WP goes into an endless loop taking me back to the same login screen without giving an error message.

Now, I tried to tyoe a wrong password, then I get this message:

ERROR: Incorrect password. Lost your password?
ERROR: Cookies are blocked or not supported by your browser. You must enable cookies to use WordPress.

Well, then used Firefox and Google Chrome to log in using the same password. It worked fine.

Trying to get to the root of the problem, and because the majority of my prospective users are using Internet Explorer, I tried to login using different PC’s using different versions of IE. I even used a different operating system (Server 2003). Still the same problem.

Just to eliminate any possibility of anything else (cookis, etc) I even formated a new pc using Windowes XP.

Still the same damn problem.

I have another hosting company that I used to install WPMU. A completely different server. Still the same problem.

Needless to say that I even tried to delete the installation and start witha fresh new copy. The same problem.

Now I tried to search through the various forums. It seems to me that many people have been having the same problem but the latest update on the issue was about six months ago.

Now bear in mind that not only my, the admin was having this problem, but any new user that tries to create a blog had the same problem.

My site is located at https://co.ps

I just cannot believe that an issue like this is still around after countless of development hours on WPMU.

Any help would be appreciated because I have wasted a good week trying to solve this issue.